My specialism is tax investigations and there seems to be plenty of those to keep me busy – whether they be simple enquiries into personal returns, complex COP 9 investigations, lengthy cross tax enquiries or helping clients to correct errors through voluntary disclosures. Unfortunately, it seems that HMRC is being increasingly aggressive in its approach whilst, at the same time, increasingly displaying ignorance of the legislation and its own guidelines, which makes for an interesting correspondence. But it ensures that tax investigation specialists like me are kept fully occupied.
What do you know now that you wish you’d known at the start of your career?
You don’t need to know everything, and it is perfectly fine to ask. I allow myself to ask at least one stupid question a day, which is my mechanism for overcoming the fear that you think you should know everything. What is nice is that, nine times out of ten, when I ask my stupid question, the response is: ‘That’s not a stupid question at all’.
Has a recent tax case caught your eye?
The Tooth decision in the Supreme Court ([2021] UKSC 17). I shed no tears at the elimination of the concept of staleness in discovery cases – it always struck me as a difficult argument given the volumes of information in HMRC’s vaults – but am delighted to see the meaning of deliberate behaviour being once more defined as requiring both knowledge and intention. We have seen a number of cases in recent years where HMRC’s view of what constitutes deliberate behaviour has stretched the limits of credulity, so hopefully this Supreme Court decision will help to put an end to that.
Are there any new rules that are causing a particular problem?
Although it was introduced by FA 2019, so it is hardly new, we are still experiencing problems with TMA 1970 s 36A which brought in extended time limits for HMRC to assess taxes on offshore matters. I’m of the firm opinion that HMRC has persistently fantasised that the solution to all the Treasury’s problems are to be found in some mythical golden egg laid by an offshore golden goose. In reality, most of the clients who we see caught by this legislation have very small amounts in offshore bank accounts, usually connected with something fairly innocuous like a time-share apartment, or a minor family inheritance, and yet they are being subjected to far more draconian legislation than even the most heinous of onshore evaders. It is disproportionate and problematic.
What are you looking out for later this year?
Whilst the chancellor deserves every credit for the many financial measures introduced to help businesses and traders overcome the pandemic, unfortunately the terms of the CJRS were not the clearest in the world and we have seen many instances where taxpayers have made wholly innocent errors in making claims. The question will be how aggressively HMRC pursue the rectification of those errors. Sadly, we also know that there were a whole fleet of fraudsters who rushed in to cheat the country and grab what they could, and I fully accept that those kinds of people should suffer the full weight of the legislation. The problem is that past experience suggests that HMRC is not good at distinguishing between the intentionally criminal and the simply inept, and seem to approach both with the same attitude.
And finally, you might not know this about me but…
I once won a knock-down karate contest whilst unconscious. My opponent – who was both much better and bigger than me – hit me in the neck with a roundhouse kick with such force that it lifted me off the ground. He was disqualified for a foul and for using excess force. I came around as they were presenting me with the trophy. But it showed me that you can still win provided you follow the rules – a valuable lesson for any tax specialist!
My specialism is tax investigations and there seems to be plenty of those to keep me busy – whether they be simple enquiries into personal returns, complex COP 9 investigations, lengthy cross tax enquiries or helping clients to correct errors through voluntary disclosures. Unfortunately, it seems that HMRC is being increasingly aggressive in its approach whilst, at the same time, increasingly displaying ignorance of the legislation and its own guidelines, which makes for an interesting correspondence. But it ensures that tax investigation specialists like me are kept fully occupied.
What do you know now that you wish you’d known at the start of your career?
You don’t need to know everything, and it is perfectly fine to ask. I allow myself to ask at least one stupid question a day, which is my mechanism for overcoming the fear that you think you should know everything. What is nice is that, nine times out of ten, when I ask my stupid question, the response is: ‘That’s not a stupid question at all’.
Has a recent tax case caught your eye?
The Tooth decision in the Supreme Court ([2021] UKSC 17). I shed no tears at the elimination of the concept of staleness in discovery cases – it always struck me as a difficult argument given the volumes of information in HMRC’s vaults – but am delighted to see the meaning of deliberate behaviour being once more defined as requiring both knowledge and intention. We have seen a number of cases in recent years where HMRC’s view of what constitutes deliberate behaviour has stretched the limits of credulity, so hopefully this Supreme Court decision will help to put an end to that.
Are there any new rules that are causing a particular problem?
Although it was introduced by FA 2019, so it is hardly new, we are still experiencing problems with TMA 1970 s 36A which brought in extended time limits for HMRC to assess taxes on offshore matters. I’m of the firm opinion that HMRC has persistently fantasised that the solution to all the Treasury’s problems are to be found in some mythical golden egg laid by an offshore golden goose. In reality, most of the clients who we see caught by this legislation have very small amounts in offshore bank accounts, usually connected with something fairly innocuous like a time-share apartment, or a minor family inheritance, and yet they are being subjected to far more draconian legislation than even the most heinous of onshore evaders. It is disproportionate and problematic.
What are you looking out for later this year?
Whilst the chancellor deserves every credit for the many financial measures introduced to help businesses and traders overcome the pandemic, unfortunately the terms of the CJRS were not the clearest in the world and we have seen many instances where taxpayers have made wholly innocent errors in making claims. The question will be how aggressively HMRC pursue the rectification of those errors. Sadly, we also know that there were a whole fleet of fraudsters who rushed in to cheat the country and grab what they could, and I fully accept that those kinds of people should suffer the full weight of the legislation. The problem is that past experience suggests that HMRC is not good at distinguishing between the intentionally criminal and the simply inept, and seem to approach both with the same attitude.
And finally, you might not know this about me but…
I once won a knock-down karate contest whilst unconscious. My opponent – who was both much better and bigger than me – hit me in the neck with a roundhouse kick with such force that it lifted me off the ground. He was disqualified for a foul and for using excess force. I came around as they were presenting me with the trophy. But it showed me that you can still win provided you follow the rules – a valuable lesson for any tax specialist!
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