There’s a line in the Flanders and Swann “Song of Patriotic Prejudice” which complains of foreigners that “They argue with umpires. They cheer when they’ve won. And they practise beforehand, which ruins the fun.”
While there is some doubt about whether they undertake the last, HMRC are certainly guilty of the first two. And in the “cheering when they’ve won” category, they’ve now taken to publishing a periodic list of the outcome of litigation in cases involving tax avoidance. The latest list is here.
It’s slightly disingenuous to describe them all as “avoidance cases”: in several of them the question was not whether the scheme in question “worked” but whether HMRC followed the correct procedures in (e.g.) raising enquiries and making assessments – procedures which are not restricted to “avoidance” cases. This is especially relevant to the “carry back” of losses from one year to another, where it’s taken 20 years to work out quite what the self-assessment rules introduced in 1996 actually mean.
Nonetheless, even setting aside the fact that some of these cases aren’t quite what HMRC represent them to be, it does remain the case that over the past year HMRC have won 22-3 – some admittedly after extra time but all involving considerable delay, uncertainty and no doubt heavy legal costs for the taxpayer. If Accelerated and Partner Payment Notices, Follower Notices, Targeted Anti-Avoidance Rules, the General Anti-Abuse Rule and the Serial Tax Avoider Regime haven’t yet brought home the message that the tax avoidance landscape has changed, the robust decisions of the courts will surely do so. To work nowadays, planning needs to be bespoke – less “clever” and more intelligent.
For more on tax planning, including extraction from past mistakes, please get in touch with your usual BKL contact or use our enquiry form.