Guiding you & your business through disputes with HMRC.

Disputes with HMRC can arise for any number of reasons. There may have been a mistake which needs to be remedied; HMRC may want more evidence to substantiate your tax position; or there may be a disagreement over how the law should be applied.

A tax enquiry can be stressful and time-consuming, with the potential for financial and reputational costs for you and your business. You should be supported by trusted advisers who can guide you effectively through the process.

Our team advises wealthy individuals, owner managed businesses and entrepreneurs on dealing with disputes and investigations across all areas of tax. We have the expertise to handle disputes relating to the most complex aspects of personal and corporate tax.  These include, for example, the remittance basis of taxation for non-domiciliaries, the taxation of offshore trusts and companies, tax arrangements for companies and individuals, including tax residence and domicile issues.

Our expertise encompasses the full range of UK taxes including income tax, capital gains tax, corporate tax, inheritance tax, stamp duty land tax and VAT. A substantial amount of the work we do involves a cross-border component.

We have significant experience providing guidance on all elements of the disputes process including HMRC’s powers, taxpayers’ rights, judicial review, tax-related penalties and the procedure for the specialist tax tribunals. One member of our team, James Austen, sits part-time as a Judge in the Tax Tribunal, hearing and determining appeals against decisions by HMRC in respect of both direct and indirect taxes. Our team also provides preventative advice so you can mitigate tax risk which may be associated with any proposed or existing arrangements.

We are committed to achieving the best outcome for you as a client. We gain a full understanding of your circumstances so we can provide solutions tailored to your specific situation. Using our in-depth knowledge HMRC practice and procedures, we always seek to negotiate a settlement which is cost effective and acceptable for both you and HMRC wherever possible. Taking a dispute to the Court or Tribunal should almost always be a last resort. However, in those cases where a settlement is either not possible or not desirable, we have the experience, ability and determination to proceed to litigation to protect our clients from attack by HMRC.

Regularising Past Non-Compliance

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In recent times, some taxpayers were badly advised and entered into marketed tax avoidance schemes which they did not understand and which were not suitable for them.

We can help in reporting any past tax avoidance to HMRC, regularising the position, and seeking to mitigate any tax penalties which might arise.

“IR35” and Consultancy Arrangements

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HMRC’s crackdown on consultancy arrangements (which it is predisposed to view as income tax and national insurance avoidance) is widely reported in the press and high on HMRC’s agenda.  There have recently been a number of high-profile cases in the Tax Tribunal.

A persuasive case can often be made for the intended tax and employment law consequences of a consultancy arrangement.  But the law in this area is developing quickly and up-to-date knowledge of the relevant principles is essential.

UK Residence

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Many internationally-mobile individuals have their corporate and/or trust structures based primarily outside the UK – albeit often with some UK nexus.

The Statutory Residence Test simplifies the residence test for individuals, in theory at least.  In reality, the rules are so complicated that detailed legal advice will often be needed – especially if HMRC make enquiries.

The position of companies and trusts is more complex still, and based on case law.  These structures can be made UK-resident by mistake – even if UK tax advice was taken when they were set up.  We are experienced in settling these cases, in one case agreeing a payment of only 10% of the tax originally demanded by HMRC.

Domicile enquiries

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We are seeing more and more domicile enquiries into international clients with a UK presence – even where HMRC had satisfied itself about a taxpayer’s overseas domicile relatively recently.  Whilst it may be unintentional on the part of HMRC, we have noticed that some communities seem more at risk than others.

Domicile is a complicated concept which is relevant to several aspects of life – including taxation.  Unfortunately, HMRC officers often misunderstand the issues and domicile enquiries balloon into intrusive and unwieldy exercises in data-gathering – usually with the justification that the responses sought all add ‘context’.

It is crucial to keep HMRC focussed on the real issues and to seek to limit the scope of the enquiry to the relevant points.  Experience of the legal and practical considerations is essential and affected taxpayers will inevitably need early advice.

Tax Investigations

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Each year, HMRC select a number of individuals or businesses at random for a compliance check.

In all but the most straightforward cases, taxpayers selected for a check should quickly seek legal advice.  It is usually prudent to assume that you have been deliberately selected rather than chosen at random.  HMRC investigations can be time-consuming and stressful and it often helps to have a professional on your side to deal with the Revenue.  Experience shows that HMRC does not always act within its powers and an experienced solicitor can frequently narrow the scope of the enquiry – and reduce any potential tax liability.

Regularising Past Non-Compliance

In recent times, some taxpayers were badly advised and entered into marketed tax avoidance schemes which they did not understand and which were not suitable for them.

We can help in reporting any past tax avoidance to HMRC, regularising the position, and seeking to mitigate any tax penalties which might arise.

“IR35” and Consultancy Arrangements

HMRC’s crackdown on consultancy arrangements (which it is predisposed to view as income tax and national insurance avoidance) is widely reported in the press and high on HMRC’s agenda.  There have recently been a number of high-profile cases in the Tax Tribunal.

A persuasive case can often be made for the intended tax and employment law consequences of a consultancy arrangement.  But the law in this area is developing quickly and up-to-date knowledge of the relevant principles is essential.

UK Residence

Many internationally-mobile individuals have their corporate and/or trust structures based primarily outside the UK – albeit often with some UK nexus.

The Statutory Residence Test simplifies the residence test for individuals, in theory at least.  In reality, the rules are so complicated that detailed legal advice will often be needed – especially if HMRC make enquiries.

The position of companies and trusts is more complex still, and based on case law.  These structures can be made UK-resident by mistake – even if UK tax advice was taken when they were set up.  We are experienced in settling these cases, in one case agreeing a payment of only 10% of the tax originally demanded by HMRC.

Domicile enquiries

We are seeing more and more domicile enquiries into international clients with a UK presence – even where HMRC had satisfied itself about a taxpayer’s overseas domicile relatively recently.  Whilst it may be unintentional on the part of HMRC, we have noticed that some communities seem more at risk than others.

Domicile is a complicated concept which is relevant to several aspects of life – including taxation.  Unfortunately, HMRC officers often misunderstand the issues and domicile enquiries balloon into intrusive and unwieldy exercises in data-gathering – usually with the justification that the responses sought all add ‘context’.

It is crucial to keep HMRC focussed on the real issues and to seek to limit the scope of the enquiry to the relevant points.  Experience of the legal and practical considerations is essential and affected taxpayers will inevitably need early advice.

Tax Investigations

Each year, HMRC select a number of individuals or businesses at random for a compliance check.

In all but the most straightforward cases, taxpayers selected for a check should quickly seek legal advice.  It is usually prudent to assume that you have been deliberately selected rather than chosen at random.  HMRC investigations can be time-consuming and stressful and it often helps to have a professional on your side to deal with the Revenue.  Experience shows that HMRC does not always act within its powers and an experienced solicitor can frequently narrow the scope of the enquiry – and reduce any potential tax liability.

View our Tax disputes & investigations Lawyers:

James Austen

James Austen

Partner

Talk to James about Trusts, tax & estate planning

Jonny Mitchell

Jonny Mitchell

Associate

Talk to Jonny about Banking & financial disputes