One minute with Morag Ofili, barrister at Harbottle & Lewis.
What’s keeping you busy at work?
My practice tends to focus on tax risk advisory, investigations and disputes for owner managed businesses and high net worth individuals. At the moment, I have a healthy mix of clients from the sports, entertainment and tech world seeking support on matters that involve multiple jurisdictions (and overlapping tax issues), either on a personal or business level. Whilst most of my matters never end up before a judge, I do spend a bit of time in the tribunal, and I am preparing for a hearing in the Court of Appeal early in the new year.
If you could make one change to tax, what would it be?
Over the years, I have seen a hardening in HMRC’s attitude towards taxpayers during enquiry. Most taxpayers want to get it right, so I would make changes to the way in which enquiries are handled. Our tax system is not easy and as a result mistakes can and will happen. There needs to be a fairer balance between the powers of HMRC to collect tax and the importance of protecting the rights of the public.
What do you know now that you wish you’d known at the start of your career?
I spent too much time at the outset of my career trying to find the ‘right’ answer. Because of the complexity of the tax legislation, very often there is no ‘right’ answer. I did not appreciate the subtleties of tax analysis and interpretation (and how this can impact advice and approach) until much later on.
Has a recent case caught your eye?
In Nuttall v HMRC [2022] UKFTT 192 (TC), the First-tier Tribunal (FTT) determined that it had jurisdiction to bar HMRC from proceeding in circumstances where HMRC’s delay in undertaking an enquiry meant there could not be a fair trial.
This case is interesting in the context of the expanding jurisdiction of FTT, but it also has wider ramifications for many taxpayers who have been locked in enquiry with HMRC for several years and, by the time the matter reaches the FTT, documents are not available or witnesses have moved on.
Normally, when taxpayers complain of delay, the standard answer from HMRC (which is in practice accepted by the FTT) is that they could have made an application to close the enquiry at any point using the provisions contained in TMA 1970 s 28A. However, this argument was rejected by the FTT in this case which said that it was important to distinguish between HMRC’s culpability for the delay and the available remedy.
Ultimately, the taxpayer failed to provide sufficient evidence of the impact of the delay to establish sufficient prejudice, but in circumstances where many enquiries run for several years, this case opens up a new route for taxpayers to challenge HMRC delay beyond the current complaints process.
What should we look out for in the year ahead?
More professional negligence claims. As HMRC continues to clear the Covid-19 investigation backlog, clients that are facing unexpected tax, penalty and interest liabilities are looking for ways to recoup some of the cost from their previous advisers. History has taught us that economic downturn can cause people and companies to look for new ways to access cash, so I expect these types of queries to increase in 2023.
And finally, you might not know this about me but...
I started my career focused on crime and briefly worked at HMP Brixton before training as a criminal barrister.
One minute with Morag Ofili, barrister at Harbottle & Lewis.
What’s keeping you busy at work?
My practice tends to focus on tax risk advisory, investigations and disputes for owner managed businesses and high net worth individuals. At the moment, I have a healthy mix of clients from the sports, entertainment and tech world seeking support on matters that involve multiple jurisdictions (and overlapping tax issues), either on a personal or business level. Whilst most of my matters never end up before a judge, I do spend a bit of time in the tribunal, and I am preparing for a hearing in the Court of Appeal early in the new year.
If you could make one change to tax, what would it be?
Over the years, I have seen a hardening in HMRC’s attitude towards taxpayers during enquiry. Most taxpayers want to get it right, so I would make changes to the way in which enquiries are handled. Our tax system is not easy and as a result mistakes can and will happen. There needs to be a fairer balance between the powers of HMRC to collect tax and the importance of protecting the rights of the public.
What do you know now that you wish you’d known at the start of your career?
I spent too much time at the outset of my career trying to find the ‘right’ answer. Because of the complexity of the tax legislation, very often there is no ‘right’ answer. I did not appreciate the subtleties of tax analysis and interpretation (and how this can impact advice and approach) until much later on.
Has a recent case caught your eye?
In Nuttall v HMRC [2022] UKFTT 192 (TC), the First-tier Tribunal (FTT) determined that it had jurisdiction to bar HMRC from proceeding in circumstances where HMRC’s delay in undertaking an enquiry meant there could not be a fair trial.
This case is interesting in the context of the expanding jurisdiction of FTT, but it also has wider ramifications for many taxpayers who have been locked in enquiry with HMRC for several years and, by the time the matter reaches the FTT, documents are not available or witnesses have moved on.
Normally, when taxpayers complain of delay, the standard answer from HMRC (which is in practice accepted by the FTT) is that they could have made an application to close the enquiry at any point using the provisions contained in TMA 1970 s 28A. However, this argument was rejected by the FTT in this case which said that it was important to distinguish between HMRC’s culpability for the delay and the available remedy.
Ultimately, the taxpayer failed to provide sufficient evidence of the impact of the delay to establish sufficient prejudice, but in circumstances where many enquiries run for several years, this case opens up a new route for taxpayers to challenge HMRC delay beyond the current complaints process.
What should we look out for in the year ahead?
More professional negligence claims. As HMRC continues to clear the Covid-19 investigation backlog, clients that are facing unexpected tax, penalty and interest liabilities are looking for ways to recoup some of the cost from their previous advisers. History has taught us that economic downturn can cause people and companies to look for new ways to access cash, so I expect these types of queries to increase in 2023.
And finally, you might not know this about me but...
I started my career focused on crime and briefly worked at HMP Brixton before training as a criminal barrister.
