One minute with Mike Lane, head of tax at Slaughter and May.
What’s keeping you busy at work?
A broad mix of enquiries and disputes work across a range of areas from transfer pricing and loan relationship unallowable purpose through to digital services tax, together with the usual stream of M&A and financing transactional work.
If you could make one change to tax, what would it be?
I would update the consortium relief ‘disqualifying arrangements’ rules to better reflect modern commercial practice. When putting together a commercial joint venture it is frustrating for clients to be told that they can’t structure control or exit arrangements in the way that – absent tax – they would because of these rules. Or sometimes that they can but they have to jump through hoops to incorporate certain potentially commercially sensitive provisions in the company’s public articles of association and not the private shareholders’ agreement because no-one is entirely sure whether the latter is a ‘document regulating the company’ or not following the Farnborough case ([2019] EWCA Civ 118). If you have structured your arrangements for commercial reasons and not artificially to inflate the share of any tax losses in the JV to which you are entitled, you should not have to worry.
What are clients currently asking about?
A lot of variations on the theme of ‘how will X be treated for Pillar Two purposes?’ I’m often amazed by how ostensibly simple questions can turn out to be really tricky to answer. I can regularly be found with copies of the OECD’s model rules, the OECD’s commentary on the model rules, the OECD’s February administrative guidance, the OECD’s July administrative guidance, Finance (No. 2) Act 2023, HMRC’s draft guidance and the latest draft changes to the UK legislation all spread over my desk at once. The OECD’s acknowledgment in the July guidance that although the model rules, and commentary, dealt with refundable tax credits, more guidance was needed because some of the existing commentary ‘is unclear’ brought a wry smile to my face. If the architects of the rules and commentary still find some of it unclear, what hope for the rest of us?
What do you know now that you wish you’d known at the start of your career?
That the best tax lawyers aren’t just really good at understanding tax law, they are also great communicators. In this job, understanding something complicated will only get you so far. Generally, you also need to be able to explain it to someone else in a way that enables them to understand it too. And your audience may have varying levels of sophistication (and patience!). It could be shareholders in a public document, the board of the company in a briefing paper, the other side in a negotiation or a tax authority or court in a dispute. Put yourself in their shoes. What do they need to know and are you telling them that in a way that is going to enable them to get it?
Finally, you might not know this about me but...
I love running and, like many ageing runners, have adopted the approach of going longer as I get slower. You reach the point where the only way to set a new PB (personal best) is to run a distance you’ve never run before! I’ve stepped up from marathons to hilly 50 miles races in the last couple of years and am planning to take on my first 100 mile ultra in 2024.
One minute with Mike Lane, head of tax at Slaughter and May.
What’s keeping you busy at work?
A broad mix of enquiries and disputes work across a range of areas from transfer pricing and loan relationship unallowable purpose through to digital services tax, together with the usual stream of M&A and financing transactional work.
If you could make one change to tax, what would it be?
I would update the consortium relief ‘disqualifying arrangements’ rules to better reflect modern commercial practice. When putting together a commercial joint venture it is frustrating for clients to be told that they can’t structure control or exit arrangements in the way that – absent tax – they would because of these rules. Or sometimes that they can but they have to jump through hoops to incorporate certain potentially commercially sensitive provisions in the company’s public articles of association and not the private shareholders’ agreement because no-one is entirely sure whether the latter is a ‘document regulating the company’ or not following the Farnborough case ([2019] EWCA Civ 118). If you have structured your arrangements for commercial reasons and not artificially to inflate the share of any tax losses in the JV to which you are entitled, you should not have to worry.
What are clients currently asking about?
A lot of variations on the theme of ‘how will X be treated for Pillar Two purposes?’ I’m often amazed by how ostensibly simple questions can turn out to be really tricky to answer. I can regularly be found with copies of the OECD’s model rules, the OECD’s commentary on the model rules, the OECD’s February administrative guidance, the OECD’s July administrative guidance, Finance (No. 2) Act 2023, HMRC’s draft guidance and the latest draft changes to the UK legislation all spread over my desk at once. The OECD’s acknowledgment in the July guidance that although the model rules, and commentary, dealt with refundable tax credits, more guidance was needed because some of the existing commentary ‘is unclear’ brought a wry smile to my face. If the architects of the rules and commentary still find some of it unclear, what hope for the rest of us?
What do you know now that you wish you’d known at the start of your career?
That the best tax lawyers aren’t just really good at understanding tax law, they are also great communicators. In this job, understanding something complicated will only get you so far. Generally, you also need to be able to explain it to someone else in a way that enables them to understand it too. And your audience may have varying levels of sophistication (and patience!). It could be shareholders in a public document, the board of the company in a briefing paper, the other side in a negotiation or a tax authority or court in a dispute. Put yourself in their shoes. What do they need to know and are you telling them that in a way that is going to enable them to get it?
Finally, you might not know this about me but...
I love running and, like many ageing runners, have adopted the approach of going longer as I get slower. You reach the point where the only way to set a new PB (personal best) is to run a distance you’ve never run before! I’ve stepped up from marathons to hilly 50 miles races in the last couple of years and am planning to take on my first 100 mile ultra in 2024.
