One minute with Sean Bannister, the head of the tax practice at Edwin Coe.
What’s keeping you busy at work?
Lots! The result of the general election removed a great deal of uncertainty for our clients, and it triggered a desire to action plans that were put on hold.
The introduction of deemed domicile status, as it relates to income tax and CGT for long-term residents, continues to present challenges and opportunities.
If you could make one change to a tax law, what would it be?
Whilst not tax law per se, I have continuing concerns that sharing financial information across borders on an automatic basis has wide reaching and potentially dangerous ramifications for private individuals. I worry that there are insufficient safeguards in place to protect the information shared and its introduction was rushed. Whilst I commend the aspiration, all of the outcomes should have been better thought through before introducing such a substantive programme of change.
What do you know now that you wish you’d known at the start of your career?
Again, lots! I would urge everyone, no matter at what of the stage of their career, to take the time to gain a detailed understanding of their clients’ objectives. Your advice will be clearer and more concise if you do this at the beginning, rather than attempting to address unexplored areas later on in the process.
It is also important to read the actual legislation, rather than rely solely on the published commentaries. Considering technical issues is a process that relies on understanding the fundamental meaning of the law, and the only way to begin that is by picking up those books.
Are there any new rules that are causing a particular problem?
The loan charge is perhaps the most recent example of changes causing substantive issues for clients and advisers alike. The independent review undertaken by Sir Amyas Morse has resulted in a package of changes to the way the loan charge operates. Given the controversy, it is perhaps not surprising that amendments are being made to the way the charge operates, but the continued lack of certainty for taxpayers is problematic. We are working with a number of clients to secure repayments for amounts paid to HMRC under settlement agreements that represented voluntary restitution. Whilst this is a positive result for those clients, the cashflow issues created by the old regime had a grave impact on some individuals.
Has a recent tax case caught your eye?
The conflicting decisions in Embiricos v HMRC [2019] UKFTT 236 and The Executors of Levy v HMRC [2019] UKFTT 418 are very relevant to our clients who are subject to challenges based on their domicile. Both cases concerned whether domicile was a ‘matter’ for the purposes of the partial closure notice (PCN) legislation; this would determine whether HMRC was able to issue a PCN relating to this aspect of an open enquiry. HMRC’s view in both cases was that domicile was not a ‘matter’ and a PCN could not be issued.
Whilst neither decision is binding (as the cases were decided at the FTT), if HMRC is found to be correct in its interpretation of the law, it will argue that a taxpayer in such a position is required to provide information relating to their overseas income and gains for the relevant years before they are able to issue a closure notice. On issue of the closure notice, the taxpayer would then be able to appeal in the normal way.
Whilst there is a lack of clarity on this matter, we will see continuing delays in ongoing domicile enquiries.
What should we look out for in 2020?
It will be interesting to see how the new government’s tax agenda develops over the year. A government with a large majority should be able to implement change relatively swiftly, but whether they chose to so soon after the election will be interesting to see. We will know more after the Budget on 11 March.
You might not know this about me...
I have played football at Old Trafford, but sadly I fluffed my lines and failed to score.
One minute with Sean Bannister, the head of the tax practice at Edwin Coe.
What’s keeping you busy at work?
Lots! The result of the general election removed a great deal of uncertainty for our clients, and it triggered a desire to action plans that were put on hold.
The introduction of deemed domicile status, as it relates to income tax and CGT for long-term residents, continues to present challenges and opportunities.
If you could make one change to a tax law, what would it be?
Whilst not tax law per se, I have continuing concerns that sharing financial information across borders on an automatic basis has wide reaching and potentially dangerous ramifications for private individuals. I worry that there are insufficient safeguards in place to protect the information shared and its introduction was rushed. Whilst I commend the aspiration, all of the outcomes should have been better thought through before introducing such a substantive programme of change.
What do you know now that you wish you’d known at the start of your career?
Again, lots! I would urge everyone, no matter at what of the stage of their career, to take the time to gain a detailed understanding of their clients’ objectives. Your advice will be clearer and more concise if you do this at the beginning, rather than attempting to address unexplored areas later on in the process.
It is also important to read the actual legislation, rather than rely solely on the published commentaries. Considering technical issues is a process that relies on understanding the fundamental meaning of the law, and the only way to begin that is by picking up those books.
Are there any new rules that are causing a particular problem?
The loan charge is perhaps the most recent example of changes causing substantive issues for clients and advisers alike. The independent review undertaken by Sir Amyas Morse has resulted in a package of changes to the way the loan charge operates. Given the controversy, it is perhaps not surprising that amendments are being made to the way the charge operates, but the continued lack of certainty for taxpayers is problematic. We are working with a number of clients to secure repayments for amounts paid to HMRC under settlement agreements that represented voluntary restitution. Whilst this is a positive result for those clients, the cashflow issues created by the old regime had a grave impact on some individuals.
Has a recent tax case caught your eye?
The conflicting decisions in Embiricos v HMRC [2019] UKFTT 236 and The Executors of Levy v HMRC [2019] UKFTT 418 are very relevant to our clients who are subject to challenges based on their domicile. Both cases concerned whether domicile was a ‘matter’ for the purposes of the partial closure notice (PCN) legislation; this would determine whether HMRC was able to issue a PCN relating to this aspect of an open enquiry. HMRC’s view in both cases was that domicile was not a ‘matter’ and a PCN could not be issued.
Whilst neither decision is binding (as the cases were decided at the FTT), if HMRC is found to be correct in its interpretation of the law, it will argue that a taxpayer in such a position is required to provide information relating to their overseas income and gains for the relevant years before they are able to issue a closure notice. On issue of the closure notice, the taxpayer would then be able to appeal in the normal way.
Whilst there is a lack of clarity on this matter, we will see continuing delays in ongoing domicile enquiries.
What should we look out for in 2020?
It will be interesting to see how the new government’s tax agenda develops over the year. A government with a large majority should be able to implement change relatively swiftly, but whether they chose to so soon after the election will be interesting to see. We will know more after the Budget on 11 March.
You might not know this about me...
I have played football at Old Trafford, but sadly I fluffed my lines and failed to score.
