While I don’t work full time now, I’m still keeping myself out of mischief by working on transfer pricing disputes, MAPs and APAs for a few clients. I’m enjoying promoting APAs in a few African countries, and also delving into deep waters on transfer pricing principles.
If you could make one change to tax, what would it be?
The Diverted Profits Tax is now well past its sell-by date! Given the way transfer pricing has changed since the BEPS Actions 8 to 10 came out in 2017, surely there is no need for a DPT to challenge ‘artificial and contrived arrangements’? Is there still an ‘information imbalance’ that puts HMRC at a disadvantage? While the new rules may provide clearer access to treaty benefits, the better approach would be to admit that DPT’s time was up and get rid of it, especially if the Government’s aim is to encourage businesses to invest in the UK.
What advice would you give to someone starting out in their career?
Don’t be afraid to move on and take opportunities as they come along. In HMRC, you used to get moved around quite often and, while the prospect was not always that appealing, I never regretted it. I went from being the head policy person at HMRC on transfer pricing, working on legislation, dealing with international issues at OECD, speaking at conferences worldwide, to becoming the deputy controller for 26 tax offices in South and East London (in days when we still had local offices). As career changes go, it was one end of the spectrum to the other. But it taught me a lot about people, leadership and working to bring about change which was not always welcomed. From there, I went back into Head Office into an entirely new subject – employee share plans – which became my second greatest love after transfer pricing. Every different subject and experience exposed me to different challenges and built me.
Has a recent change in HMRC’s practice impacted your work?
This is where I get a bit nerdy, as the area that concerns me is HMRC’s approach to ‘delineation’ which is based on a view of the control of risks in a transaction that is leading to a proliferation of profit splits. The control of risks framework set out in the OECD’s TP Guidelines is there to determine if the transaction can be accepted and priced accordingly or if it needs to be re-delineated and then re-priced. An over-emphasis on risks (as compared to functions and assets) and on decision-makers in relation to those risks is resulting in HMRC not accepting the transaction and looking for a profit split because a decision-maker somewhere in the group is controlling a risk, or contributing to the control of that risk. This has created some very large disputes and there are a number of these now in MAP where the other jurisdictions are not accepting the basis for a profit split. My hope is that OECD will find time to come back to the Guidelines and think again about it.
You might not know this about me but...
When I’m not doing ‘tax’ these days, I’m doing ‘prisons’. I’m a member of a local community group that is pressing for improvements at Wandsworth prison. I knew nothing about prisons until 18 months ago, but now I visit the prison, meet the governor and attend the inquests of prisoners who have died inside. Along with my fellow campaigners, we engage with the public and media on the need to invest in the prison system as we want its prisoners to come out reformed and rehabilitated. Prison can be a very dark place at times and it’s only when you see it close up that you realise what issues we have created as a society that we leave our prisons to pick up.
While I don’t work full time now, I’m still keeping myself out of mischief by working on transfer pricing disputes, MAPs and APAs for a few clients. I’m enjoying promoting APAs in a few African countries, and also delving into deep waters on transfer pricing principles.
If you could make one change to tax, what would it be?
The Diverted Profits Tax is now well past its sell-by date! Given the way transfer pricing has changed since the BEPS Actions 8 to 10 came out in 2017, surely there is no need for a DPT to challenge ‘artificial and contrived arrangements’? Is there still an ‘information imbalance’ that puts HMRC at a disadvantage? While the new rules may provide clearer access to treaty benefits, the better approach would be to admit that DPT’s time was up and get rid of it, especially if the Government’s aim is to encourage businesses to invest in the UK.
What advice would you give to someone starting out in their career?
Don’t be afraid to move on and take opportunities as they come along. In HMRC, you used to get moved around quite often and, while the prospect was not always that appealing, I never regretted it. I went from being the head policy person at HMRC on transfer pricing, working on legislation, dealing with international issues at OECD, speaking at conferences worldwide, to becoming the deputy controller for 26 tax offices in South and East London (in days when we still had local offices). As career changes go, it was one end of the spectrum to the other. But it taught me a lot about people, leadership and working to bring about change which was not always welcomed. From there, I went back into Head Office into an entirely new subject – employee share plans – which became my second greatest love after transfer pricing. Every different subject and experience exposed me to different challenges and built me.
Has a recent change in HMRC’s practice impacted your work?
This is where I get a bit nerdy, as the area that concerns me is HMRC’s approach to ‘delineation’ which is based on a view of the control of risks in a transaction that is leading to a proliferation of profit splits. The control of risks framework set out in the OECD’s TP Guidelines is there to determine if the transaction can be accepted and priced accordingly or if it needs to be re-delineated and then re-priced. An over-emphasis on risks (as compared to functions and assets) and on decision-makers in relation to those risks is resulting in HMRC not accepting the transaction and looking for a profit split because a decision-maker somewhere in the group is controlling a risk, or contributing to the control of that risk. This has created some very large disputes and there are a number of these now in MAP where the other jurisdictions are not accepting the basis for a profit split. My hope is that OECD will find time to come back to the Guidelines and think again about it.
You might not know this about me but...
When I’m not doing ‘tax’ these days, I’m doing ‘prisons’. I’m a member of a local community group that is pressing for improvements at Wandsworth prison. I knew nothing about prisons until 18 months ago, but now I visit the prison, meet the governor and attend the inquests of prisoners who have died inside. Along with my fellow campaigners, we engage with the public and media on the need to invest in the prison system as we want its prisoners to come out reformed and rehabilitated. Prison can be a very dark place at times and it’s only when you see it close up that you realise what issues we have created as a society that we leave our prisons to pick up.
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