A whole host of things. My practice focuses on VAT and other indirect taxes, and I am currently advising clients within the FS, energy, retail and manufacturing sectors, on litigation and dispute resolution, HMRC investigations, and general advisory and compliance matters. October is also a busy month on the management side of things, as we’re busy with appraisals, annual promotions and half-year forecasting. Fortunately, I have a great leadership team to share the responsibility, so I can focus most of my energy on the day job of giving tax advice.
Are there any new rules that are causing a particular problem?
HMRC’s guidance on VAT early termination fees and compensation payments, following the CJEU judgments in Meo (C-295/17) and Vodafone Portugal (C-43/19), throws up multiple issues. Whilst there are clearly circumstances where such payments should attract VAT, the cases were decided on their facts, and it is quite a stretch to interpret them as establishing a general principle that most payments are subject to VAT.
Further, to give the new guidance retrospective effect, as HMRC has done, is quite unbelievable. HMRC has offered exemption from retrospectivity where the taxpayer had a ruling that the supplies were outside the scope of VAT, but with the previous guidance being so clear and well established, such rulings are likely to be as rare as golden tickets. Many taxpayers will rightly feel they have a legitimate expectation that HMRC will apply its previously published guidance as stated. To avoid potentially years of expensive and time-consuming litigation, HMRC should at least remove the threat of retrospectivity.
Has a recent case caught your eye?
It’s not a tax case, but a case that may have implications for tax hearings, particularly for overseas clients with UK interests, is the recent High Court decision in Gubarev & another v Orbis Business Intelligence Ltd & another [2020] EWHC 2167 (QB).
As a general rule, the livestreaming of court proceedings is prohibited, unless permitted by law (such as Supreme Court streaming). Due to coronavirus, a new temporary statutory exception was introduced to enable courts to broadcast hearings conducted ‘wholly as video hearings’, something the tax tribunal has done well.
Gubarev confirms that this new exception does not apply to ‘hybrid’ hearings, i.e. where some participants attend in person, typically the judge and advocates, while others join remotely, such as clients and witnesses.
This limitation creates a practical issue because while judges have some discretion to permit video transmission of a hybrid hearing within England and Wales, it does not extend to other jurisdictions. Parties will therefore need to take this into account when deciding on their preferred format for a hearing.
What’s on the horizon later this year?
Businesses have until 20 October 2020 to notify HMRC under amnesty that they have not met the compliance requirements for furlough payments. More than 80,000 employers have already returned payments, so there has clearly been widespread non-compliance. I suspect there are also still a significant number of employers who have unknowingly breached the requirements, whether because of well-intentioned furloughed staff helping to progress work, or by simply misunderstanding the rules.
HMRC investigations are already well underway, and this will inevitably continue for some years to come – the cost of the scheme, as of 16 August 2020, was £35.4bn – so it is important that all potentially affected businesses review their furlough compliance as a matter of urgency.
You might not know this about me but...
I wanted to be a DJ. Unfortunately, my debut in a Brixton pub in the mid-90s crashed rather spectacularly as a result of ‘turntable failure’. But if anyone does need a DJ who will play only 80s and 90s hip hop records, I am sure I could be tempted out of retirement!
A whole host of things. My practice focuses on VAT and other indirect taxes, and I am currently advising clients within the FS, energy, retail and manufacturing sectors, on litigation and dispute resolution, HMRC investigations, and general advisory and compliance matters. October is also a busy month on the management side of things, as we’re busy with appraisals, annual promotions and half-year forecasting. Fortunately, I have a great leadership team to share the responsibility, so I can focus most of my energy on the day job of giving tax advice.
Are there any new rules that are causing a particular problem?
HMRC’s guidance on VAT early termination fees and compensation payments, following the CJEU judgments in Meo (C-295/17) and Vodafone Portugal (C-43/19), throws up multiple issues. Whilst there are clearly circumstances where such payments should attract VAT, the cases were decided on their facts, and it is quite a stretch to interpret them as establishing a general principle that most payments are subject to VAT.
Further, to give the new guidance retrospective effect, as HMRC has done, is quite unbelievable. HMRC has offered exemption from retrospectivity where the taxpayer had a ruling that the supplies were outside the scope of VAT, but with the previous guidance being so clear and well established, such rulings are likely to be as rare as golden tickets. Many taxpayers will rightly feel they have a legitimate expectation that HMRC will apply its previously published guidance as stated. To avoid potentially years of expensive and time-consuming litigation, HMRC should at least remove the threat of retrospectivity.
Has a recent case caught your eye?
It’s not a tax case, but a case that may have implications for tax hearings, particularly for overseas clients with UK interests, is the recent High Court decision in Gubarev & another v Orbis Business Intelligence Ltd & another [2020] EWHC 2167 (QB).
As a general rule, the livestreaming of court proceedings is prohibited, unless permitted by law (such as Supreme Court streaming). Due to coronavirus, a new temporary statutory exception was introduced to enable courts to broadcast hearings conducted ‘wholly as video hearings’, something the tax tribunal has done well.
Gubarev confirms that this new exception does not apply to ‘hybrid’ hearings, i.e. where some participants attend in person, typically the judge and advocates, while others join remotely, such as clients and witnesses.
This limitation creates a practical issue because while judges have some discretion to permit video transmission of a hybrid hearing within England and Wales, it does not extend to other jurisdictions. Parties will therefore need to take this into account when deciding on their preferred format for a hearing.
What’s on the horizon later this year?
Businesses have until 20 October 2020 to notify HMRC under amnesty that they have not met the compliance requirements for furlough payments. More than 80,000 employers have already returned payments, so there has clearly been widespread non-compliance. I suspect there are also still a significant number of employers who have unknowingly breached the requirements, whether because of well-intentioned furloughed staff helping to progress work, or by simply misunderstanding the rules.
HMRC investigations are already well underway, and this will inevitably continue for some years to come – the cost of the scheme, as of 16 August 2020, was £35.4bn – so it is important that all potentially affected businesses review their furlough compliance as a matter of urgency.
You might not know this about me but...
I wanted to be a DJ. Unfortunately, my debut in a Brixton pub in the mid-90s crashed rather spectacularly as a result of ‘turntable failure’. But if anyone does need a DJ who will play only 80s and 90s hip hop records, I am sure I could be tempted out of retirement!
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