One minute with Helen Adams, principal in BDO’s tax dispute resolution team.
What’s keeping you busy at work?
My multifaceted role means that there’s never a dull moment. Supporting clients through complex enquiries means spending time helping them understand HMRC’s concerns and the sort of contemporaneous evidence needed to demonstrate what actually happened or that their means position is explainable. This also involves critically reviewing HMRC’s information requests to establish what is reasonably required, available or within the client’s power and possession.
I also advise colleagues on technical aspects of their cases. A fresh pair of eyes can be helpful when considering whether a client’s behaviour was careless or deliberate or whether, given the facts, it is realistic to argue that the client took reasonable care or had a reasonable excuse. In other situations, I advise on appealing discovery assessments and penalties.
In addition to sharing knowledge on new developments in legislation, case law and HMRC processes, I also monitor changes to tax policies and consider what further changes are likely given the government’s stated economic ambitions.
If you could make one change to a tax law, what would it be?
I would simplify the UK’s tax management laws, particularly those relating to post-submission compliance check processes, into one new Act. TMA 1970 is showing its pre-digitalisation age and processes could be streamlined for the benefit of taxpayers, HMRC and agents. As part of this, consequential claim rules should be overhauled so taxpayers don’t need to pay more tax when making a disclosure than they would have done if they filed correctly in the first place.
Compliance check processes could be simplified. Is there still justification for different processes for PAYE compared to corporation tax checks, for example?
The sheer number of tax-geared penalties could be streamlined too. They are not well publicised and the deterrent effect may be improved if the system was simpler.
Has a recent tax case caught your eye?
Georgiou & another v HMRC [2022] UKFTT 455 is an example of just how important evidence is for discovery and penalty assessments for both taxpayers and HMRC. Whether a discovery was made is both a subjective and objective test: the officer’s belief must be objectively reasonable (Anderson v HMRC [2018] UKUT 159). Extrapolations of profits or income should consider all relevant factors, such as downturns in sales due to illness or death of key personnel, seasonal variations or the fact that some premises are in more prosperous areas. If undeclared income or profits are suspected, is the figure credible and does following the money, by checking personal bank statements, lifestyle costs and the funding of acquisitions (e.g. property), confirm or contradict the officer’s suspicions and assumptions?
Case law is littered with decisions where insufficient evidence was presented to the tribunal, sometimes because appeals are heard many years after the tax year, memories fade and not all records are retained (compared to extended assessment time limits). Georgiou is an example of how evidence was collated to counter HMRC’s assertions and persuade the tribunal to overturn HMRC’s assessments.
What should we look out for this year?
As the deadline for offshore corporates owning UK property to join the Companies House register of overseas entities (ROE) has passed, we should expect HMRC to obtain and analyse the ROE data. Comparing the data against information it already holds should enable HMRC to identify taxpayers who it is concerned declared insufficient UK tax in past years. We should then see HMRC open compliance checks into those offshore corporates and the structures in which they are held, as well as the directors, shareholders and trust beneficiaries connected to them.
And finally, you might not know this about me but...
I am happiest when walking in the countryside or pottering in my garden.
One minute with Helen Adams, principal in BDO’s tax dispute resolution team.
What’s keeping you busy at work?
My multifaceted role means that there’s never a dull moment. Supporting clients through complex enquiries means spending time helping them understand HMRC’s concerns and the sort of contemporaneous evidence needed to demonstrate what actually happened or that their means position is explainable. This also involves critically reviewing HMRC’s information requests to establish what is reasonably required, available or within the client’s power and possession.
I also advise colleagues on technical aspects of their cases. A fresh pair of eyes can be helpful when considering whether a client’s behaviour was careless or deliberate or whether, given the facts, it is realistic to argue that the client took reasonable care or had a reasonable excuse. In other situations, I advise on appealing discovery assessments and penalties.
In addition to sharing knowledge on new developments in legislation, case law and HMRC processes, I also monitor changes to tax policies and consider what further changes are likely given the government’s stated economic ambitions.
If you could make one change to a tax law, what would it be?
I would simplify the UK’s tax management laws, particularly those relating to post-submission compliance check processes, into one new Act. TMA 1970 is showing its pre-digitalisation age and processes could be streamlined for the benefit of taxpayers, HMRC and agents. As part of this, consequential claim rules should be overhauled so taxpayers don’t need to pay more tax when making a disclosure than they would have done if they filed correctly in the first place.
Compliance check processes could be simplified. Is there still justification for different processes for PAYE compared to corporation tax checks, for example?
The sheer number of tax-geared penalties could be streamlined too. They are not well publicised and the deterrent effect may be improved if the system was simpler.
Has a recent tax case caught your eye?
Georgiou & another v HMRC [2022] UKFTT 455 is an example of just how important evidence is for discovery and penalty assessments for both taxpayers and HMRC. Whether a discovery was made is both a subjective and objective test: the officer’s belief must be objectively reasonable (Anderson v HMRC [2018] UKUT 159). Extrapolations of profits or income should consider all relevant factors, such as downturns in sales due to illness or death of key personnel, seasonal variations or the fact that some premises are in more prosperous areas. If undeclared income or profits are suspected, is the figure credible and does following the money, by checking personal bank statements, lifestyle costs and the funding of acquisitions (e.g. property), confirm or contradict the officer’s suspicions and assumptions?
Case law is littered with decisions where insufficient evidence was presented to the tribunal, sometimes because appeals are heard many years after the tax year, memories fade and not all records are retained (compared to extended assessment time limits). Georgiou is an example of how evidence was collated to counter HMRC’s assertions and persuade the tribunal to overturn HMRC’s assessments.
What should we look out for this year?
As the deadline for offshore corporates owning UK property to join the Companies House register of overseas entities (ROE) has passed, we should expect HMRC to obtain and analyse the ROE data. Comparing the data against information it already holds should enable HMRC to identify taxpayers who it is concerned declared insufficient UK tax in past years. We should then see HMRC open compliance checks into those offshore corporates and the structures in which they are held, as well as the directors, shareholders and trust beneficiaries connected to them.
And finally, you might not know this about me but...
I am happiest when walking in the countryside or pottering in my garden.
