I have a very varied practice, so there is a lot going on in these interesting times. In addition to the increasing volume of transactional matters, the current climate is creating new complexities. Travel restrictions and remote working seem likely to be with us for the foreseeable future, and some clients are becoming increasingly concerned about both permanent establishment risk and the risk that remote employees may be subject to payroll withholding in other jurisdictions.
The end of the Brexit transition period is also fast approaching. Clients who have waited as long as they can to push the button on supply chain alterations now feel they must do so to ensure that their UK businesses are appropriately structured to deal with the VAT and customs duties complexities and costs from 1 January 2021.
If you could make one change to tax law or practice, what would it be?
I do wish that we could roll back the practice of taxing (or more often un-taxing) by guidance. In the UK, we are now regularly cursed with incredibly vague and/or widely drawn legislation which often does not make sense without excessive reference to HMRC guidance. The suggestion earlier this year that taxpayers could be penalised for taking a contrary view of the law to HMRC was particularly worrying.
What do you know now that you wish you’d known at the start of your career?
Colleagues and my wider tax network have helped me more than I ever thought possible. Having someone who can talk you through a tricky point or lend a different perspective is invaluable. I would encourage anyone starting out to put effort into building and maintaining such relationships.
Are there any new rules that are causing a particular problem?
At the risk of repeating what others have said, DAC 6 is the perfect combination of vague and widely drawn legislation leading to over-reliance on guidance to understand its application. It does not help that the approach to the rules being taken by the UK and EU member states varies quite considerably. HMRC seems to be taking a largely pragmatic view of the rules, but that is not necessarily the case in all implementing jurisdictions. I also find it a little strange that the UK’s implementation of DAC 6 does not really cater for the fact that the UK is no longer an EU member state, which perhaps raises a wider question of why the UK is pressing ahead with implementation in its current form.
Has a recent case has caught your eye?
The recent advocate general (AG) opinion in Commission v PolandandCommission v Hungary (Case C-596/19 P) is an example of the tension between the European Commission’s approach to the EU state aid rules and the rights of member states to design their own tax systems. A number of years ago, both Poland and Hungary attempted to introduce progressive turnover-based taxes, which the Commission found to confer a selective advantage on undertakings with low turnover. The Commission’s reasoning was a little concerning as, if upheld, it could severely restrict the ability of member states to design their own tax systems. Both the EU General Court (which annulled the Commission’s decision) and also the AG opinion are therefore welcome, insofar as they make clear that it is for member states to define what constitutes ‘normal’ taxation in their jurisdiction, save in cases of manifest inconsistency of approach
This is another example of how the EU’s state aid rules are being stretched by the Commission in an effort to extend EU competence in the area of taxation. It is probably naïve to think that EU state aid rules will not continue to have at least some bearing on the UK going forward, so this is definitely an area to keep an eye on.
Finally, you might not know this about me but...
I’m currently helping to restore an early 1990s Lotus Elan, which is causing almost (but not quite) as much angst as DAC 6!
I have a very varied practice, so there is a lot going on in these interesting times. In addition to the increasing volume of transactional matters, the current climate is creating new complexities. Travel restrictions and remote working seem likely to be with us for the foreseeable future, and some clients are becoming increasingly concerned about both permanent establishment risk and the risk that remote employees may be subject to payroll withholding in other jurisdictions.
The end of the Brexit transition period is also fast approaching. Clients who have waited as long as they can to push the button on supply chain alterations now feel they must do so to ensure that their UK businesses are appropriately structured to deal with the VAT and customs duties complexities and costs from 1 January 2021.
If you could make one change to tax law or practice, what would it be?
I do wish that we could roll back the practice of taxing (or more often un-taxing) by guidance. In the UK, we are now regularly cursed with incredibly vague and/or widely drawn legislation which often does not make sense without excessive reference to HMRC guidance. The suggestion earlier this year that taxpayers could be penalised for taking a contrary view of the law to HMRC was particularly worrying.
What do you know now that you wish you’d known at the start of your career?
Colleagues and my wider tax network have helped me more than I ever thought possible. Having someone who can talk you through a tricky point or lend a different perspective is invaluable. I would encourage anyone starting out to put effort into building and maintaining such relationships.
Are there any new rules that are causing a particular problem?
At the risk of repeating what others have said, DAC 6 is the perfect combination of vague and widely drawn legislation leading to over-reliance on guidance to understand its application. It does not help that the approach to the rules being taken by the UK and EU member states varies quite considerably. HMRC seems to be taking a largely pragmatic view of the rules, but that is not necessarily the case in all implementing jurisdictions. I also find it a little strange that the UK’s implementation of DAC 6 does not really cater for the fact that the UK is no longer an EU member state, which perhaps raises a wider question of why the UK is pressing ahead with implementation in its current form.
Has a recent case has caught your eye?
The recent advocate general (AG) opinion in Commission v PolandandCommission v Hungary (Case C-596/19 P) is an example of the tension between the European Commission’s approach to the EU state aid rules and the rights of member states to design their own tax systems. A number of years ago, both Poland and Hungary attempted to introduce progressive turnover-based taxes, which the Commission found to confer a selective advantage on undertakings with low turnover. The Commission’s reasoning was a little concerning as, if upheld, it could severely restrict the ability of member states to design their own tax systems. Both the EU General Court (which annulled the Commission’s decision) and also the AG opinion are therefore welcome, insofar as they make clear that it is for member states to define what constitutes ‘normal’ taxation in their jurisdiction, save in cases of manifest inconsistency of approach
This is another example of how the EU’s state aid rules are being stretched by the Commission in an effort to extend EU competence in the area of taxation. It is probably naïve to think that EU state aid rules will not continue to have at least some bearing on the UK going forward, so this is definitely an area to keep an eye on.
Finally, you might not know this about me but...
I’m currently helping to restore an early 1990s Lotus Elan, which is causing almost (but not quite) as much angst as DAC 6!
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