Trying to look beyond the current crisis is difficult, but I think what will start to loom significantly before too long will be some fundamental questions of a ‘what are we here for’ nature. What will the job of the tax professional be as businesses of all shapes and sizes become more automated? Is there an argument that being a tax adviser should bring responsibility to do more of HMRC’s job of confirming tax bills are right? How do we ensure the highest professional standards? Is licencing (not regulation) a way forward and, if so, how should it be established? John Whiting, GAAR advisory panel chair (3 April)
A wise person (who happened to be an expert on canon law, rather than tax law) once said to me: ‘You cannot be too careful, but you can be too cautious’. Working out where care finishes and caution starts, is much harder than I realised at the time, and I should have taken the chance to seek more guidance. I often find myself trying to work out where the dividing line lies. Gerald Montagu, Gide Loyrette Nouel (17 July)
Tax law is not a soft option, but it is excellent for combining a demanding, intellectually challenging career with life outside work. Hearings are typically short and scheduled long in advance. Urgent applications are rare. I recommend a career in tax law for anyone looking for intellectual stimulation and a work/life balance. I have also benefited from inspiring role models who have shown how to excel in a tax career, in their differing styles and on their own terms: Dame Philippa Whipple, Melanie Hall QC and Nicola Shaw QC all immediately come to mind. Find people who inspire you, but don’t be afraid to practise on your own terms. Valentina Sloane QC, Monckton Chambers (16 March)
People worry about the risk of taking an action but often discount the risk of not acting. I think that is valuable to remember, whether in a career progression context or giving advice. Don’t sit on the fence. Jenny Doak, Weil, Gotshal & Manges (6 April)
How lucky we were in 1986 to have clear, concise tax legislation drafted by superb parliamentary draftsmen! The quality has steadily declined, and the style can now best be described as ‘computer programming school’. Alongside the decline in quality, we’ve seen a massive increase in volume. The two are not unrelated: ‘I apologise for the long letter, I didn’t have time to write a short one.’ Philip Harrison, The Wilkes Partnership (30 October)
Why DAC 6, of course! The new EU mandatory disclosure rules (DAC 6 or ‘DOTAS on steroids’) are my biggest headache. As Dentons is a global firm, rolling out these rules internally is no mean feat, from building the internal risk management control system through to developing the training programme for all our employees. The lack of consistency over the interpretation of these rules across the EU doesn’t help. Alex Tostevin, Dentons (22 October). (Editor’s note: DAC 6 topped the list of answers to this question this year.)
High-income child benefit charge: Something needs to be done about this charge. There are multiple issues, such as the higher marginal tax rate between £50,000 and £60,000, the need to know whether child benefit is being claimed and which partner has the higher earnings, and the need to file a self-assessment tax return if the charge applies. Also, there is the unforeseen consequence of not making a child benefit claim in terms of missing out on NI credits. Peter Goodman, Wilkins Kennedy (10 July)
Uncertainty over the uncertain tax notification proposals: What stood out for me is the Budget proposal for large businesses to notify HMRC where they take a tax treatment relying on an uncertain legal interpretation which HMRC is likely to challenge. While the accounting standard IFRIC 23 already requires entities to consider the probable attitude of a tax authority to a particular tax treatment in drawing up its accounts, there is all the difference in the world between a provision aimed at getting the accounts right and one where, on pain of penalty, one has to notify the tax authority. I support the desire for openness between large business and HMRC officers, but in my experience that already operates successfully with the business risk review system. I don’t think that adding a penal requirement like this is the way to achieve it. Simon Wilks, independent adviser (23 April). (Editor’s note: This proposal also caused much consternation among many tax professionals. Happily, the government has since announced a delay to its implementation.)
Baseball lessons: I could make a change, it would be to resolve more disputes through ‘baseball arbitration’ where the arbitrator or court has to choose one side’s position in its entirety. This would help concentrate minds on all sides. The biggest risk for many taxpayers is double taxation, and a better arbitration process is central to managing that. Mark Bevington, ADE Tax (5 June)
Data-driven decisions: HMRC should be made to collect better data and store it in a format useful for policy makers. At the moment, vast amounts of information are submitted to HMRC each year and yet relatively little is known about basic behaviour, such as how much is given away each year or the cost of BPR and APR in terms of lifetime giving. Better data would mean better policy making. Emma Chamberlain QC, Pump Court Tax Chambers (7 February)
More realism: The need for change in the law should be balanced against the resources of the tax authority. Given this constraint, I think it would be more productive to focus on strengthening the relationship between the tax authority and tax advisers. So much recent UK tax legislation seems to start from the harmful premise that the taxpayer is out to dodge its obligations to pay. This starting point no doubt influences the passing of anti-avoidance legislation which is drafted so broadly that it can easily capture genuine commercial transactions, and this cannot be to anyone’s benefit. Karl Mah, Latham & Watkins (27 March)
Purpose v benefit: Replace the ‘main purpose’ test with something more akin to the ‘main benefit contrary to tax policy’ test in the new DAC 6 regulations. That test is easier to work with in practice. Let me also pose this question. If the government introduces a tax relief to encourage a change in behaviour, and pops in a main purpose TAAR to protect against misuse, when does a desire to access the relief of itself amount to such a misuse (thus denying the relief)? That’s not an easy question to answer in many cases. Jason Collins, Pinsent Masons (28 February)
Changing times: Culturally, society has shifted to consuming headlines or single articles, rather than being sufficiently curious to read into a topic in depth. In the tax space, this has increased misinformation and a growing perception that both advisers and in-house teams are motivated by finding ways to evade paying tax. All members of the press and the profession should ensure that topical tax issues are communicated in a way that is understandable to the man on the street, so that the cloak of complexity is removed and we help improve the reputation of the corporate taxpayer and their advisers. It would also obviously help if the underlying legislation wasn’t so complex in the first place. Gemma Beck, Inmarsat (25 September)
More JR-style challenges: Allowing judicial review-style challenges to be run in the First-tier Tribunal and the ability to commence JR applications in the Upper Tribunal. ‘JR-style challenges’ means disputes where HMRC exercises a discretion, applies an ESC or departs from published guidance with adverse consequences for a taxpayer or a group of taxpayers, and it is alleged that the decision is irrational and/or unfair. It would also be helpful for the specialist tribunal to be able to determine cases impugning the procedural or substantive validity of a formal notice issued by HMRC with the exception of any expressly ousted by Parliament. This change would significantly improve access to justice for all taxpayers, reduce satellite litigation in multiple fora and relieve the demand on resources in the Administrative Court. If vexatious litigants were of concern, the tribunals could apply rules similar to those in the civil procedure rules, and a JR costs regime could also be implemented. Ximena Montes Manzano, Temple Tax Chambers (18 September)
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. Stuart Walsh, Pinsent Masons (16 October)
The decision in AXA SA v Genworth Financial International Holdings LLC and others [2020] EWHC 2024 (Comm) is interesting to anyone dealing with tax provisions in transactional documentation, as it relates to how some fairly workaday language in a gross up clause (‘subject to tax’) could be interpreted as applying to tax which was not (or not yet) actually due. Philip Alfandary, Rosenblatt (2 October)
After having concerns about the value for money for the Treasury aspect of the ‘eat out to help out’ scheme when it was first announced, it struck me afterwards that it could have been a stroke of genius as far as data collection goes. In a period of a month, HMRC was receiving granular data from more or less every restaurant in the country. This data set could enable HMRC to carry out targeted compliance visits to the hospitality sector for years to come. Or maybe I’m just being paranoid... Tim Stovold, Moore Kingston Smith (13 November)
I appeared in Three Men and a Little Lady, a 1990s film with Ted Danson, Tom Selleck, Steve Guttenberg and Fiona Shaw. I acted a schoolgirl eating lunch in the convent dining room. The scene took ages to film and I had to eat cold, revolting fish pie in every take. Despite outward appearances, tax law is far more glamorous than the movies. Valentina Sloane QC, Monckton Chambers (16 March)
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... Stuart Walsh, Pinsent Masons (16 October)
I’m studying for an MA in psychotherapy and counselling in my spare time. Not much overlap with being a tax lawyer, you might think. However, in both cases, I find there is often a requirement to gently challenge a client (or colleague) on what they say they want and help them to accept what is possible! Emma Bailey, Fox Williams (8 May)
I once appeared with a group of friends on the BBC2 daytime quiz show, Eggheads. We will forever be haunted by our lack of knowledge of the colour ecru. Hugh Gunson, Charles Russell Speechlys (31 January)
I am the proud owner of an English Angora rabbit. It was purchased in a moment of madness in lockdown, but it is delightful – and already huge! Danny Blum, Eversheds Sutherland (6 November)
Trying to look beyond the current crisis is difficult, but I think what will start to loom significantly before too long will be some fundamental questions of a ‘what are we here for’ nature. What will the job of the tax professional be as businesses of all shapes and sizes become more automated? Is there an argument that being a tax adviser should bring responsibility to do more of HMRC’s job of confirming tax bills are right? How do we ensure the highest professional standards? Is licencing (not regulation) a way forward and, if so, how should it be established? John Whiting, GAAR advisory panel chair (3 April)
A wise person (who happened to be an expert on canon law, rather than tax law) once said to me: ‘You cannot be too careful, but you can be too cautious’. Working out where care finishes and caution starts, is much harder than I realised at the time, and I should have taken the chance to seek more guidance. I often find myself trying to work out where the dividing line lies. Gerald Montagu, Gide Loyrette Nouel (17 July)
Tax law is not a soft option, but it is excellent for combining a demanding, intellectually challenging career with life outside work. Hearings are typically short and scheduled long in advance. Urgent applications are rare. I recommend a career in tax law for anyone looking for intellectual stimulation and a work/life balance. I have also benefited from inspiring role models who have shown how to excel in a tax career, in their differing styles and on their own terms: Dame Philippa Whipple, Melanie Hall QC and Nicola Shaw QC all immediately come to mind. Find people who inspire you, but don’t be afraid to practise on your own terms. Valentina Sloane QC, Monckton Chambers (16 March)
People worry about the risk of taking an action but often discount the risk of not acting. I think that is valuable to remember, whether in a career progression context or giving advice. Don’t sit on the fence. Jenny Doak, Weil, Gotshal & Manges (6 April)
How lucky we were in 1986 to have clear, concise tax legislation drafted by superb parliamentary draftsmen! The quality has steadily declined, and the style can now best be described as ‘computer programming school’. Alongside the decline in quality, we’ve seen a massive increase in volume. The two are not unrelated: ‘I apologise for the long letter, I didn’t have time to write a short one.’ Philip Harrison, The Wilkes Partnership (30 October)
Why DAC 6, of course! The new EU mandatory disclosure rules (DAC 6 or ‘DOTAS on steroids’) are my biggest headache. As Dentons is a global firm, rolling out these rules internally is no mean feat, from building the internal risk management control system through to developing the training programme for all our employees. The lack of consistency over the interpretation of these rules across the EU doesn’t help. Alex Tostevin, Dentons (22 October). (Editor’s note: DAC 6 topped the list of answers to this question this year.)
High-income child benefit charge: Something needs to be done about this charge. There are multiple issues, such as the higher marginal tax rate between £50,000 and £60,000, the need to know whether child benefit is being claimed and which partner has the higher earnings, and the need to file a self-assessment tax return if the charge applies. Also, there is the unforeseen consequence of not making a child benefit claim in terms of missing out on NI credits. Peter Goodman, Wilkins Kennedy (10 July)
Uncertainty over the uncertain tax notification proposals: What stood out for me is the Budget proposal for large businesses to notify HMRC where they take a tax treatment relying on an uncertain legal interpretation which HMRC is likely to challenge. While the accounting standard IFRIC 23 already requires entities to consider the probable attitude of a tax authority to a particular tax treatment in drawing up its accounts, there is all the difference in the world between a provision aimed at getting the accounts right and one where, on pain of penalty, one has to notify the tax authority. I support the desire for openness between large business and HMRC officers, but in my experience that already operates successfully with the business risk review system. I don’t think that adding a penal requirement like this is the way to achieve it. Simon Wilks, independent adviser (23 April). (Editor’s note: This proposal also caused much consternation among many tax professionals. Happily, the government has since announced a delay to its implementation.)
Baseball lessons: I could make a change, it would be to resolve more disputes through ‘baseball arbitration’ where the arbitrator or court has to choose one side’s position in its entirety. This would help concentrate minds on all sides. The biggest risk for many taxpayers is double taxation, and a better arbitration process is central to managing that. Mark Bevington, ADE Tax (5 June)
Data-driven decisions: HMRC should be made to collect better data and store it in a format useful for policy makers. At the moment, vast amounts of information are submitted to HMRC each year and yet relatively little is known about basic behaviour, such as how much is given away each year or the cost of BPR and APR in terms of lifetime giving. Better data would mean better policy making. Emma Chamberlain QC, Pump Court Tax Chambers (7 February)
More realism: The need for change in the law should be balanced against the resources of the tax authority. Given this constraint, I think it would be more productive to focus on strengthening the relationship between the tax authority and tax advisers. So much recent UK tax legislation seems to start from the harmful premise that the taxpayer is out to dodge its obligations to pay. This starting point no doubt influences the passing of anti-avoidance legislation which is drafted so broadly that it can easily capture genuine commercial transactions, and this cannot be to anyone’s benefit. Karl Mah, Latham & Watkins (27 March)
Purpose v benefit: Replace the ‘main purpose’ test with something more akin to the ‘main benefit contrary to tax policy’ test in the new DAC 6 regulations. That test is easier to work with in practice. Let me also pose this question. If the government introduces a tax relief to encourage a change in behaviour, and pops in a main purpose TAAR to protect against misuse, when does a desire to access the relief of itself amount to such a misuse (thus denying the relief)? That’s not an easy question to answer in many cases. Jason Collins, Pinsent Masons (28 February)
Changing times: Culturally, society has shifted to consuming headlines or single articles, rather than being sufficiently curious to read into a topic in depth. In the tax space, this has increased misinformation and a growing perception that both advisers and in-house teams are motivated by finding ways to evade paying tax. All members of the press and the profession should ensure that topical tax issues are communicated in a way that is understandable to the man on the street, so that the cloak of complexity is removed and we help improve the reputation of the corporate taxpayer and their advisers. It would also obviously help if the underlying legislation wasn’t so complex in the first place. Gemma Beck, Inmarsat (25 September)
More JR-style challenges: Allowing judicial review-style challenges to be run in the First-tier Tribunal and the ability to commence JR applications in the Upper Tribunal. ‘JR-style challenges’ means disputes where HMRC exercises a discretion, applies an ESC or departs from published guidance with adverse consequences for a taxpayer or a group of taxpayers, and it is alleged that the decision is irrational and/or unfair. It would also be helpful for the specialist tribunal to be able to determine cases impugning the procedural or substantive validity of a formal notice issued by HMRC with the exception of any expressly ousted by Parliament. This change would significantly improve access to justice for all taxpayers, reduce satellite litigation in multiple fora and relieve the demand on resources in the Administrative Court. If vexatious litigants were of concern, the tribunals could apply rules similar to those in the civil procedure rules, and a JR costs regime could also be implemented. Ximena Montes Manzano, Temple Tax Chambers (18 September)
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. Stuart Walsh, Pinsent Masons (16 October)
The decision in AXA SA v Genworth Financial International Holdings LLC and others [2020] EWHC 2024 (Comm) is interesting to anyone dealing with tax provisions in transactional documentation, as it relates to how some fairly workaday language in a gross up clause (‘subject to tax’) could be interpreted as applying to tax which was not (or not yet) actually due. Philip Alfandary, Rosenblatt (2 October)
After having concerns about the value for money for the Treasury aspect of the ‘eat out to help out’ scheme when it was first announced, it struck me afterwards that it could have been a stroke of genius as far as data collection goes. In a period of a month, HMRC was receiving granular data from more or less every restaurant in the country. This data set could enable HMRC to carry out targeted compliance visits to the hospitality sector for years to come. Or maybe I’m just being paranoid... Tim Stovold, Moore Kingston Smith (13 November)
I appeared in Three Men and a Little Lady, a 1990s film with Ted Danson, Tom Selleck, Steve Guttenberg and Fiona Shaw. I acted a schoolgirl eating lunch in the convent dining room. The scene took ages to film and I had to eat cold, revolting fish pie in every take. Despite outward appearances, tax law is far more glamorous than the movies. Valentina Sloane QC, Monckton Chambers (16 March)
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... Stuart Walsh, Pinsent Masons (16 October)
I’m studying for an MA in psychotherapy and counselling in my spare time. Not much overlap with being a tax lawyer, you might think. However, in both cases, I find there is often a requirement to gently challenge a client (or colleague) on what they say they want and help them to accept what is possible! Emma Bailey, Fox Williams (8 May)
I once appeared with a group of friends on the BBC2 daytime quiz show, Eggheads. We will forever be haunted by our lack of knowledge of the colour ecru. Hugh Gunson, Charles Russell Speechlys (31 January)
I am the proud owner of an English Angora rabbit. It was purchased in a moment of madness in lockdown, but it is delightful – and already huge! Danny Blum, Eversheds Sutherland (6 November)
