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One minute with... Nicholas Gardner

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What’s keeping you busy at work?

M&A activity levels are high at the moment, in part driven by a desire to complete deals pre-budget and potential CGT increases. I’ve just advised McLaren on an equity investment by MSP Sports Capital into its racing division. I’ve also seen a large number of debt and equity capital market fund raisings and IPOs this year. On the contentious side, it has been particularly busy particularly in relation to some national insurance and VAT cases which raise some very interesting questions.

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

It’s so hard to limit this to one single change. One issue that has been causing difficulties recently is the 20 year Scottish prescription period for NICs. This contrasts with the six year limitation period for English companies. Companies do not maintain records for this long which presents major challenges if HMRC raises assessments over this extended period. If permitted more changes, I would abolish TAARs (unnecessary in the light of the GAAR), and then consider reforms to other complex legislation, such as Part 7A of ITEPA 2003.

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

That the two Yellow and single Orange Handbooks in 2002 would now occupy nine volumes. Whilst simplification is desperately needed for juniors, there are opportunities arising from these constant changes: new taxes level the playing field and allow anyone to become an expert.

Are there any new rules that are causing a particular problem?

I’ve been working on our firm’s DAC 6 steering group implementing these reporting rules. Whilst the January amendments in the UK have removed most of the hallmarks and made this much simpler, our EU offices have to apply the full set of hallmarks in the EU directive, and we need systems in place for both. It remains to be seen whether the information reported will justify the compliance burden they impose on intermediaries.

Has a tax case caught your eye?

A recent one is Atholl House [2021] UKUT 37 (TCC): an Upper Tribunal decision on IR35 involving Kaye Adams. With the introduction of the off-payroll working rules in April, IR35 issues will come under a lot of scrutiny from HMRC. The IR35 tests are complex – not least because of the application of the case law regarding employment status which is highly fact sensitive. This decision doesn’t just address the question whether the employment test is satisfied by assessing the Ready Mixed Concrete principles but also has some interesting guidance as to how to construct the hypothetical contract between the worker and the client and the weight to be placed on the actual contractual terms and the conduct of the parties.

What issues have clients been raising since the new year?

The increased trend in working away from the office presents new challenges for mobile working issues with individuals working for lengthy periods in jurisdictions other than their usual tax residence. This requires consideration of new social security arrangements in the EU/UK Trade and Cooperation Agreement. Interesting questions are also starting to emerge regarding the interpretation of retained EU law post Brexit. It will be some time before we have guidance on these issues from the courts.

Finally, you might not know this about me but...

Over the lockdown, I’ve learnt to cook my favourite dessert, tarte tatin – which has been very enjoyable but not so good for the waistline!

Issue: 1528
Categories: One minute with