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One minute with... Jitendra Patel

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What’s keeping you busy at work?

A variety of client matters: I’m currently handling a number of complex tax disputes with HMRC, advising on business reorganisations and basis period transition, and having discussions on upcoming tax changes, such as the carried interest reforms and predictions for the next Budget, particularly those relevant to businesses and their owners.

If you could make one change to a tax law or practice, what would it be?

It has become more and more difficult for businesses to obtain certainty about the tax consequences of a particular transaction or arrangement, due to increasing complexity in the tax rules coupled with a reduced ability to obtain a clear view from HMRC. Their resources are thinly spread, but investment in this area would reduce the risk to both HMRC and the taxpayer of attritional disputes arising further down the line.

What do you know now that you wish you’d known at the start of your career?

I grew up in an immigrant, lower socioeconomic household in a deprived northern city and was educated at a poor-performing comprehensive school where I received free school meals, often used as a measure of a disadvantaged background. Coming into the professional world, most of my colleagues seemed better prepared and more naturally suited to the environment, leaving me to feel out of place and not having the confidence to push myself forward for fear of being found out. It took me a long time to realise that people from different backgrounds can contribute equally and that I didn’t need to pretend to be like everyone else. I’d tell my younger self to be yourself and back yourself to succeed.

Has a recent change in HMRC practice impacted your work?

A significant stir has been caused by HMRC’s recent change of practice concerning the salaried members rules, specifically their view that the targeted anti-avoidance rule applies to arrangements under which LLP members increase their capital contributions to ensure compliance with Condition C. This seems contrary to the policy intent and, understandably, LLPs and representatives have raised concerns that HMRC have got this completely wrong. Perhaps a wider worry is the signal this sends about HMRC’s apparent willingness to take retroactive compliance action following a change of view, calling into question the ability of taxpayers to place trust in HMRC’s published guidance and, in some instances, direct assurances previously provided. I hope that HMRC reconsiders this one.

Has a recent tax case caught your eye?

The FTT decision in The Boston Consulting Group LLP [2024] UKFTT 84 (TC) highlights the difficulties of being able to implement an equity incentive arrangement for individuals within a partnership structure without hitting against the risk of HMRC seeking to apply the mixed member partnership rules or, alternatively, taxing gains as miscellaneous income. The judgment probably goes down as a score draw – with Boston winning the mixed member argument but losing on miscellaneous income – and a replay at the Upper Tribunal is expected. Whatever the outcome, the government ought to recognise that the provision of capital incentives to individuals within partnerships for commercial reasons is not in principle something that should be discouraged by the tax system.

You might not know this about me but...

I am very much an accidental tax adviser. After graduating from university with a science degree, I worked through a number of temporary jobs, the last of which involved operating a bottling machine at a large chemical plant. When the site was due to shut down for a month to ‘oil the machines’, I applied for a job in a HMRC call centre. From there, I was accepted onto HMRC’s tax inspector training programme (where incidentally I also met my lovely wife) and remained there for over ten years, before moving into practice with BDO. I guess the lesson is that you can forge a great career from unexpected beginnings. 

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