One minute with Mark Whitehouse, partner at PwC Legal
You work in one of the largest dedicated tax disputes teams in the UK. What ambitions do you have for the team going forwards?
I am very proud of the team that we have and the work that we do. It is increasingly the case that resolving any tax issue requires a broad range of skills: tax technical skills certainly, but forensic skills in terms of the facts and a broad understanding all of the potential routes to resolution, are also essential. The legal tax disputes team in PwC is now fully embedded in the tax practice and that enables us to move seamlessly between different approaches as a dispute evolves. I have no doubt that we are perfectly placed to be the largest contentious tax practice in the UK.
What’s a key trend in tax disputes?
One of the obvious trends is that tax disputes are increasingly no longer confined to purely domestic tax issues. Any cross-border issue is likely now to involve at an early stage exchange of information and the complex network of rules and principles that are relevant to this. HMRC will want to understand the broader context; inevitably they will look across the global value chain. In addition to multilateral cooperation between tax authorities and all of the changes that are designed to encourage this, specific unilateral measures (such as the diverted profit tax in the UK) have to be considered. These trends are beginning to have a very significant effect on the approach and the critical pinch points; it is no longer enough to be comfortable only with the position in your own patch.
Is there a recent tax case that caught your eye?
One case that did strike me as interesting was the recent Upper Tribunal decision in Coal Staff Superannuation Scheme Trustees v HMRC [2017] UKUT 137. The case is particularly topical as it involves the question of how to manage on-going access to the CJEU in the light of Brexit. The underlying tax issue was the application of EU law, in particular the freedom of movement of capital, to the manufactured overseas dividend regime. The FTT had decided that freedom of movement of capital was not engaged, and even if it were, the regime would be justified. The taxpayer was thus appealing to the UT. In essence, and for a number of reasons (practical and legal), the UT was urged to make a reference immediately (and before hearing the substantive appeal from the FTT) since access to the CJEU might well become impossible if the case needed to be referred after the substantive hearing. The UT was not prepared to take this step. Whilst acknowledging that future access to the CJEU was at best uncertain, this did not justify a pre-emptive reference; it was still necessary to address the question of whether a reference would involve a question of ‘general importance’ where a ruling would be likely to ‘promote the uniform application of law throughout the EU’ (the Court of Appeal’s Trinity Mirror Plc test). The UT did not consider it possible to address this absence a substantive hearing.
EU law is now so entwined in UK domestic tax law, that the approach to and determination of EU principles is likely to be one of the areas that will be the greatest source of uncertainty in the next ten years. That, of course, is not an issue confined to tax!
Can you share a practical tip on handling tax disputes?
Above all, I think I would say don’t underestimate the facts. It is relatively easy to get comfortable with how a particular provision is to be approached and construed. But tax only applies to the facts and that they can be elusive.
And finally, you might not know this about me but…
I used to be choosy about what I read. I now am an avid fan of crime writing – and the Queen of Icelandic noir, Ysra Sigurdardottir is my current guilty pleasure.
One minute with Mark Whitehouse, partner at PwC Legal
You work in one of the largest dedicated tax disputes teams in the UK. What ambitions do you have for the team going forwards?
I am very proud of the team that we have and the work that we do. It is increasingly the case that resolving any tax issue requires a broad range of skills: tax technical skills certainly, but forensic skills in terms of the facts and a broad understanding all of the potential routes to resolution, are also essential. The legal tax disputes team in PwC is now fully embedded in the tax practice and that enables us to move seamlessly between different approaches as a dispute evolves. I have no doubt that we are perfectly placed to be the largest contentious tax practice in the UK.
What’s a key trend in tax disputes?
One of the obvious trends is that tax disputes are increasingly no longer confined to purely domestic tax issues. Any cross-border issue is likely now to involve at an early stage exchange of information and the complex network of rules and principles that are relevant to this. HMRC will want to understand the broader context; inevitably they will look across the global value chain. In addition to multilateral cooperation between tax authorities and all of the changes that are designed to encourage this, specific unilateral measures (such as the diverted profit tax in the UK) have to be considered. These trends are beginning to have a very significant effect on the approach and the critical pinch points; it is no longer enough to be comfortable only with the position in your own patch.
Is there a recent tax case that caught your eye?
One case that did strike me as interesting was the recent Upper Tribunal decision in Coal Staff Superannuation Scheme Trustees v HMRC [2017] UKUT 137. The case is particularly topical as it involves the question of how to manage on-going access to the CJEU in the light of Brexit. The underlying tax issue was the application of EU law, in particular the freedom of movement of capital, to the manufactured overseas dividend regime. The FTT had decided that freedom of movement of capital was not engaged, and even if it were, the regime would be justified. The taxpayer was thus appealing to the UT. In essence, and for a number of reasons (practical and legal), the UT was urged to make a reference immediately (and before hearing the substantive appeal from the FTT) since access to the CJEU might well become impossible if the case needed to be referred after the substantive hearing. The UT was not prepared to take this step. Whilst acknowledging that future access to the CJEU was at best uncertain, this did not justify a pre-emptive reference; it was still necessary to address the question of whether a reference would involve a question of ‘general importance’ where a ruling would be likely to ‘promote the uniform application of law throughout the EU’ (the Court of Appeal’s Trinity Mirror Plc test). The UT did not consider it possible to address this absence a substantive hearing.
EU law is now so entwined in UK domestic tax law, that the approach to and determination of EU principles is likely to be one of the areas that will be the greatest source of uncertainty in the next ten years. That, of course, is not an issue confined to tax!
Can you share a practical tip on handling tax disputes?
Above all, I think I would say don’t underestimate the facts. It is relatively easy to get comfortable with how a particular provision is to be approached and construed. But tax only applies to the facts and that they can be elusive.
And finally, you might not know this about me but…
I used to be choosy about what I read. I now am an avid fan of crime writing – and the Queen of Icelandic noir, Ysra Sigurdardottir is my current guilty pleasure.
