One minute with Hilary Barclay, consultant at Burges Salmon LLP
What’s keeping you busy at work?
A good mix: there are plenty of private deals around at the moment, especially in the energy and renewables sector, and some interesting advisory work. That includes some follow-up advice on a last minute Brexit-related reorganisation. In that particular case, the issue was not the UK rules changing but UK investments ceasing to qualify for exemption in another jurisdiction when the transition period ended. Happily, there was a fairly simple solution and no UK investments were lost.
If you could make one change to tax, what would it be?
Like many others, I would welcome simplification across the board. It is slightly mind-boggling that, after years of enacting very broadly drafted legislation and leaving taxpayers to rely on guidance and case law, we are about to introduce rules requiring large businesses to notify uncertain tax positions. Even if the proposals are improved, requiring taxpayers to report uncertainty within a fundamentally complex and uncertain tax system is likely to do little more than increase taxpayers’ compliance burdens and further stretch an under-resourced HMRC.
What do you know now that you wish you’d known at the start of your career?
That it’s okay to take a different path, or a longer and more winding path, to build an enjoyable career. And that it’s fine to do the other things in life that you want to do at a time that suits you. It is really encouraging to see the next generation being braver about their career and life decisions. Though things are still far from perfect, there has been a very welcome shift towards more flexibility.
Are there any new developments that are causing a particular problem?
Inevitably it will take time for the full impact of Brexit to become clear; we are only just starting our journey on interpreting retained EU law, for example. Also, HMRC’s position on the VAT treatment of termination payments is still causing concern, though I am cautiously optimistic that we will see a reassuring (and more technically sound) update soon. These sorts of issues add to the complexity and uncertainty in our tax system more generally, of course (did I mention my reservations about the uncertain positions proposals?).
Has a recent case has caught your eye?
I know I’m not alone in having a keen interest in the Court of Appeal’s decision in HMRC v Development Securities plc and others [2020] EWCA Civ 1705. As with other (relatively) recent cases on corporate tax residence, it won’t affect the advice prudent advisers give as the core principles of the central management and control test have not changed. It does again reinforce the message that the facts – and supporting evidence – are critical. Corporate residence enquiries create a significant drain on management time and are costly to manage, so it is important to ensure residence is managed well. It is also worth remembering that some other jurisdictions have similar rules, so the UK may not be the only jurisdiction interested in who is managing a company, and from where. This point is particularly important now our treaties use the MLI corporate residence tie-breaker, which leaves it to the competent authorities to endeavour to reach mutual agreement.
Finally, you might not know this about me but...
My family, like a lot of others, is neurodiverse (and brilliant, obviously, but then I am biased!). Neurodiversity covers a range of differences in the ways in which people’s brains work, including autism, ADHD, dyslexia and dyspraxia. It isn’t talked about enough but awareness is growing and businesses increasingly appreciate the talent and value that people who think differently can bring. Many neurodiverse people have skills that are very useful for tax (e.g. creative thinking and/or deep technical focus), so as a profession we should be well placed to help build inclusive workplaces.
One minute with Hilary Barclay, consultant at Burges Salmon LLP
What’s keeping you busy at work?
A good mix: there are plenty of private deals around at the moment, especially in the energy and renewables sector, and some interesting advisory work. That includes some follow-up advice on a last minute Brexit-related reorganisation. In that particular case, the issue was not the UK rules changing but UK investments ceasing to qualify for exemption in another jurisdiction when the transition period ended. Happily, there was a fairly simple solution and no UK investments were lost.
If you could make one change to tax, what would it be?
Like many others, I would welcome simplification across the board. It is slightly mind-boggling that, after years of enacting very broadly drafted legislation and leaving taxpayers to rely on guidance and case law, we are about to introduce rules requiring large businesses to notify uncertain tax positions. Even if the proposals are improved, requiring taxpayers to report uncertainty within a fundamentally complex and uncertain tax system is likely to do little more than increase taxpayers’ compliance burdens and further stretch an under-resourced HMRC.
What do you know now that you wish you’d known at the start of your career?
That it’s okay to take a different path, or a longer and more winding path, to build an enjoyable career. And that it’s fine to do the other things in life that you want to do at a time that suits you. It is really encouraging to see the next generation being braver about their career and life decisions. Though things are still far from perfect, there has been a very welcome shift towards more flexibility.
Are there any new developments that are causing a particular problem?
Inevitably it will take time for the full impact of Brexit to become clear; we are only just starting our journey on interpreting retained EU law, for example. Also, HMRC’s position on the VAT treatment of termination payments is still causing concern, though I am cautiously optimistic that we will see a reassuring (and more technically sound) update soon. These sorts of issues add to the complexity and uncertainty in our tax system more generally, of course (did I mention my reservations about the uncertain positions proposals?).
Has a recent case has caught your eye?
I know I’m not alone in having a keen interest in the Court of Appeal’s decision in HMRC v Development Securities plc and others [2020] EWCA Civ 1705. As with other (relatively) recent cases on corporate tax residence, it won’t affect the advice prudent advisers give as the core principles of the central management and control test have not changed. It does again reinforce the message that the facts – and supporting evidence – are critical. Corporate residence enquiries create a significant drain on management time and are costly to manage, so it is important to ensure residence is managed well. It is also worth remembering that some other jurisdictions have similar rules, so the UK may not be the only jurisdiction interested in who is managing a company, and from where. This point is particularly important now our treaties use the MLI corporate residence tie-breaker, which leaves it to the competent authorities to endeavour to reach mutual agreement.
Finally, you might not know this about me but...
My family, like a lot of others, is neurodiverse (and brilliant, obviously, but then I am biased!). Neurodiversity covers a range of differences in the ways in which people’s brains work, including autism, ADHD, dyslexia and dyspraxia. It isn’t talked about enough but awareness is growing and businesses increasingly appreciate the talent and value that people who think differently can bring. Many neurodiverse people have skills that are very useful for tax (e.g. creative thinking and/or deep technical focus), so as a profession we should be well placed to help build inclusive workplaces.
