One minute with Heather Gething, head of the London tax disputes practice at Herbert Smith Freehills
What advice would you give to someone new to the profession?
When reading new legislation, ensure you understand the scheme of the Act and the purpose of the legislation. You will become an instinctive but accurate adviser.
Name a memorable moment from your career to date.
Sitting in the House of Lords in the BMBF v Mawson case in 2004, when Lord Hoffmann puts to Mr Goy representing HMRC a point I had proposed be incorporated into the case before the House of Lords to undermine the earlier decisions. Herbert Smith represented the Bord Gáis, the lessee of the UK Irish interconnector gas pipe that would have paid increased rent if the allowances were not forthcoming. We were engaged at the stage of the final appeal to the House of Lords. The point was that HMRC had denied the relief because a non-UK resident company was benefiting from a UK tax relief being funded by UK taxpayers. That would have been contrary to the EU Treaty. The High Court decision of Park J was the most earlier cogent decision in the case; he had noted some ‘waspish’ comments made by the Special Commissioner, but went on to agree with them. Lord Hoffmann put it in rather colourful language: that HMRC did not like ‘Johnny foreigner’ benefiting from allowances paid for by UK taxpayers. Mr Goy denied it and saidHMRC distanced itself from these statements. The focus then shifted away from Park J’s decision and onto more fertile ground of our choosing.
Comment on a trend in tax.
There is a trend in tax for ever more detailed legislation which has no introductory umbrella provisions that set the scene. In consequence, the legislation is difficult to read and it is difficult to deduce an overriding purpose which would inform the entire provision. This leads advisers to focus on literal meanings and gives rise to what HMRC would consider avoidance. It is a terrible cycle. It might be broken if the draftsman had the courage to introduce umbrella provisions.
If you could make one change to UK tax law, what would it be?
I would replace the capital allowances code with a simple depreciation allowance based on straight line depreciation.
What’s the most eyecatching item in the Finance Bill?
The proposals for HMRC to extract monies from bank accounts without the prior approval of the courts represents an attitude that prevails in some quarters that collecting tax is no more than an administrative action and that any barrier to collection can be removed by administrative action. Collection of tax can only legitimately be done when there is shown to be an obligation to pay. If a taxpayer contests the obligation, the matter can only be decided with the intervention of a tribunal or court or by agreement with a mediator.
What’s your view on alternative dispute resolution?
Formal alternative dispute resolution is only available where there is a factual dispute, such as what is the arm’s length price of a service, so it cannot deal with the majority of disputes which are disputes of law and fact. I have not been able to take advantage of it so far, but I understand the techniques are being used especially in small cases which should be encouraged.
When are you happiest?
Walking in the hills or sitting in Ronnie Scott’s jazz club listening to Joe Stilgoe singing and playing the piano, while drinking a glass of white burgundy.
One minute with Heather Gething, head of the London tax disputes practice at Herbert Smith Freehills
What advice would you give to someone new to the profession?
When reading new legislation, ensure you understand the scheme of the Act and the purpose of the legislation. You will become an instinctive but accurate adviser.
Name a memorable moment from your career to date.
Sitting in the House of Lords in the BMBF v Mawson case in 2004, when Lord Hoffmann puts to Mr Goy representing HMRC a point I had proposed be incorporated into the case before the House of Lords to undermine the earlier decisions. Herbert Smith represented the Bord Gáis, the lessee of the UK Irish interconnector gas pipe that would have paid increased rent if the allowances were not forthcoming. We were engaged at the stage of the final appeal to the House of Lords. The point was that HMRC had denied the relief because a non-UK resident company was benefiting from a UK tax relief being funded by UK taxpayers. That would have been contrary to the EU Treaty. The High Court decision of Park J was the most earlier cogent decision in the case; he had noted some ‘waspish’ comments made by the Special Commissioner, but went on to agree with them. Lord Hoffmann put it in rather colourful language: that HMRC did not like ‘Johnny foreigner’ benefiting from allowances paid for by UK taxpayers. Mr Goy denied it and saidHMRC distanced itself from these statements. The focus then shifted away from Park J’s decision and onto more fertile ground of our choosing.
Comment on a trend in tax.
There is a trend in tax for ever more detailed legislation which has no introductory umbrella provisions that set the scene. In consequence, the legislation is difficult to read and it is difficult to deduce an overriding purpose which would inform the entire provision. This leads advisers to focus on literal meanings and gives rise to what HMRC would consider avoidance. It is a terrible cycle. It might be broken if the draftsman had the courage to introduce umbrella provisions.
If you could make one change to UK tax law, what would it be?
I would replace the capital allowances code with a simple depreciation allowance based on straight line depreciation.
What’s the most eyecatching item in the Finance Bill?
The proposals for HMRC to extract monies from bank accounts without the prior approval of the courts represents an attitude that prevails in some quarters that collecting tax is no more than an administrative action and that any barrier to collection can be removed by administrative action. Collection of tax can only legitimately be done when there is shown to be an obligation to pay. If a taxpayer contests the obligation, the matter can only be decided with the intervention of a tribunal or court or by agreement with a mediator.
What’s your view on alternative dispute resolution?
Formal alternative dispute resolution is only available where there is a factual dispute, such as what is the arm’s length price of a service, so it cannot deal with the majority of disputes which are disputes of law and fact. I have not been able to take advantage of it so far, but I understand the techniques are being used especially in small cases which should be encouraged.
When are you happiest?
Walking in the hills or sitting in Ronnie Scott’s jazz club listening to Joe Stilgoe singing and playing the piano, while drinking a glass of white burgundy.
