I started as a partner at Harwood Hutton earlier this year, so I’ve been learning about our clients and seeing where the opportunities are for building the indirect tax practice. The coronavirus outbreak has highlighted the critical importance of cashflow, and I’ve been on the phone with clients walking them through the help on offer from HMRC.
If you could make one change to tax law or practice, what would it be?
One change I have been thinking about is in relation to the option to tax. Even before coronavirus, HMRC had a big backlog of work and, understandably, it was hard to get information. A public register of options to tax that had been lodged would be helpful. A recent property deal I was working on fell through as the lender wanted to see confirmation from HMRC of any historic options to tax. A public listing would have helped resolved that. I accept there would be a number of issues to consider before such a change could be made, not least taxpayer confidentiality.
What do you know now that you wish you’d known at the start of your career?
I have come to realise the importance of actually reading a case and not just a summary. It’s a skill I have been developing during these long days of lockdown. Case summaries are great but when you actually read the case in full, you see how the judgment has come about and, more important, where it could be applied to your own clients.
Are there any new rules that are causing a particular problem?
The changes that will result when the UK leave the EU single market will impact many businesses. We are spending time with our clients looking at the changes that will need to be made, which could be logistics changes as well as tax changes. An example is the requirement to appoint a fiscal representative as a condition of being VAT-registered in the EU, which could result in increased costs to a business.
What should we look out for later this year?
I would have said to look out for the introduction of zero-rating for certain electronic publications, which was due to happen from 1 December 2020 as announced at the recent Budget (following the earlier Upper Tribunal decision in News Corp UK & Ireland [2019] UKUT 404), but I see that the government brought that change forward with effect from 1 May.
Another important VAT change this year is the new domestic reverse charge for construction services, which is due to come into effect from 1 October 2020 (after being postponed from last year). It is a major change to the VAT accounting in this sector but will affect businesses differently depending on where they are in the supply chain. The effect on cashflow will be significant for many. All affected business will need to review their VAT accounting.
Are there any other interesting developments you’ve spotted?
One development I have noticed is the growing use of surveys in tax appeals. Dodadine Ltd [2019] UKFTT 748 (TC) was a case about an activity box consisting of a book and various craft materials. As part of its case, the business presented the results of a survey it had undertaken to determine how important the magazine was to its customers. Although there was only a low take-up for the survey, the tribunal preferred this statistical approach to HMRC’s where the officer just asked the view of two colleagues who had children. A survey was also used in the Premier Family Martial Arts LLP [2020] UKFTT 1 (TC) case but, unfortunately in this case, they asked the wrong question!
You might not know this about me…
Before I started my career in tax, I had been working as a youth worker in inner city Liverpool. It was a good grounding in listening skills and how to deal with a variety of different situations.
I started as a partner at Harwood Hutton earlier this year, so I’ve been learning about our clients and seeing where the opportunities are for building the indirect tax practice. The coronavirus outbreak has highlighted the critical importance of cashflow, and I’ve been on the phone with clients walking them through the help on offer from HMRC.
If you could make one change to tax law or practice, what would it be?
One change I have been thinking about is in relation to the option to tax. Even before coronavirus, HMRC had a big backlog of work and, understandably, it was hard to get information. A public register of options to tax that had been lodged would be helpful. A recent property deal I was working on fell through as the lender wanted to see confirmation from HMRC of any historic options to tax. A public listing would have helped resolved that. I accept there would be a number of issues to consider before such a change could be made, not least taxpayer confidentiality.
What do you know now that you wish you’d known at the start of your career?
I have come to realise the importance of actually reading a case and not just a summary. It’s a skill I have been developing during these long days of lockdown. Case summaries are great but when you actually read the case in full, you see how the judgment has come about and, more important, where it could be applied to your own clients.
Are there any new rules that are causing a particular problem?
The changes that will result when the UK leave the EU single market will impact many businesses. We are spending time with our clients looking at the changes that will need to be made, which could be logistics changes as well as tax changes. An example is the requirement to appoint a fiscal representative as a condition of being VAT-registered in the EU, which could result in increased costs to a business.
What should we look out for later this year?
I would have said to look out for the introduction of zero-rating for certain electronic publications, which was due to happen from 1 December 2020 as announced at the recent Budget (following the earlier Upper Tribunal decision in News Corp UK & Ireland [2019] UKUT 404), but I see that the government brought that change forward with effect from 1 May.
Another important VAT change this year is the new domestic reverse charge for construction services, which is due to come into effect from 1 October 2020 (after being postponed from last year). It is a major change to the VAT accounting in this sector but will affect businesses differently depending on where they are in the supply chain. The effect on cashflow will be significant for many. All affected business will need to review their VAT accounting.
Are there any other interesting developments you’ve spotted?
One development I have noticed is the growing use of surveys in tax appeals. Dodadine Ltd [2019] UKFTT 748 (TC) was a case about an activity box consisting of a book and various craft materials. As part of its case, the business presented the results of a survey it had undertaken to determine how important the magazine was to its customers. Although there was only a low take-up for the survey, the tribunal preferred this statistical approach to HMRC’s where the officer just asked the view of two colleagues who had children. A survey was also used in the Premier Family Martial Arts LLP [2020] UKFTT 1 (TC) case but, unfortunately in this case, they asked the wrong question!
You might not know this about me…
Before I started my career in tax, I had been working as a youth worker in inner city Liverpool. It was a good grounding in listening skills and how to deal with a variety of different situations.
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