Under the Spotlight - Ernst & Young · print Under the Spotlight June 2013 5 The new rules, which...

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Tax risk and dispute resolution insights June 2013

Under the Spotlight

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1Under the Spotlight June 2013

Chris Oates

For more information, or if you would like a free of charge initial consultation, please contact one of our TCRM specialists.

In this edition we look at a wide range of topics, including:

► UK GAAR sees the light of day — reactions to the proposed General Anti-Abuse Rule

► Turning the screw on tax avoiders — understanding the new tax and procurement rules

► Crown Dependency Disclosure Facilities — an explanation of HMRC’s three new facilities

► Legal Professional Privilege — An insight into the possible impact of the ‘Prudential’ decision on legal advice provided by tax professionals

► VAT disputes — using Alternative Dispute Resolution more effectively

If you’d like to keep up to date with the changing tax environment, details of how you can sign up to receive our weekly UK tax news are given below.

As always we are grateful for your feedback, so please do let us know what you think about this edition of Under the Spotlight.

Partner — Tax Controversy & Risk Management

Chris leads Ernst & Young’s London Tax Controversy and Risk Management practice. Prior to joining Ernst & Young, Chris spent over 20 years at HMRC, in the Large Business Service office, and latterly in charge of teams in Special Civil Investigations offices which handle the most serious cases involving tax avoidance and evasion. Since joining Ernst & Young over ten years ago, Chris has helped clients, from FTSE 100 to high-net-worth individuals, to successfully manage the enquiry process with HMRC.

Partner — Financial Services

Helen leads Ernst & Young’s Financial Services Tax Controversy & Risk Management team. Having originally trained as a tax lawyer at a ‘Magic Circle’ firm, prior to joining Ernst & Young Helen spent 11 years at a major UK bank, in the group tax function and latterly in the investment bank. During this time, her roles included being head of tax risk for the group corporate tax team. Helen has considerable experience of successfully handling contentious issues in the financial services sector at every stage, from initial implementation to resolution.

Helen Maddaford

Welcome ...… to the June 2013 edition of Under the Spotlight.

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UK GAAR sees the light of day

Rakhim Mirzayev and Geoff Lloyd discuss recent general anti-abuse rule (GAAR) milestones and how it has been received. After years of extensive consultation, the UK GAAR is now in the process of being legislated and the related HMRC guidance approved by the Advisory Panel has been published.

The GAAR, now part of Finance Bill 2013, is proposed to have effect for tax arrangements entered into on or after Royal Assent (expected to be in July 2013). The GAAR represents a significant shift in the UK’s approach to tax avoidance, where tax planning that could previously have been considered as legitimate can be set aside as a result of an abusive tax avoidance purpose. It is therefore not surprising to see extensive interest from a wide array of groups, including nongovernmental organisations, tax practitioners, politicians and tax academics.

Summary of the GAAR rules

The GAAR is aimed at ‘tax arrangements’ which are ‘abusive’. ‘Tax arrangements’ are broadly defined as those arrangements where it would be reasonable to conclude (having taken all circumstances into account) that the main purpose, or one of the main purposes, of the arrangements is to obtain a tax advantage. This sets a fairly low initial threshold.

A higher threshold is then applied by confining the application of the GAAR to tax arrangements which are ‘abusive’. Arrangements are ‘abusive’ where the entering into, or

carrying out of, the arrangements cannot ‘reasonably be regarded as a reasonable course of action’ in relation to the relevant tax provisions (the so called ‘double reasonableness’ test), having regard to all the circumstances. This is at the core of the GAAR.

The proposal includes a number of safeguards to protect taxpayers including establishment of an independent Advisory Panel which will consider GAAR cases and approve HMRC guidance.

The GAAR’s reception

Following two periods of extensive consultation ending in February 2013, publication of draft legislation in clauses 203 to 212 and Schedule 41 to Finance Bill 2013 on 28 March and HMRC’s guidance as approved by the Interim Advisory Panel, on 15 April, it is timely to consider how the GAAR has been received by various interested parties. This article summarises the range of reactions as evidenced by responses to the GAAR consultation and the Finance Bill debate on the floor of the House of Commons on 17 April.

http://www.hmrc.gov.uk/avoidance/gaar.htm


http://services.parliament.uk/bills/2012-13/financeno2.html

http://services.parliament.uk/bills/2012-13/financeno2.html


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For many UK businesses a key question is whether the UK GAAR will be limited to abusive, contrived and artificial tax arrangements, or whether it will affect ‘the centre ground of tax planning’. This is evidenced by the number of responses (i.e., over 160 substantive responses) that were submitted to HMRC in the course of the summer 2012 consultation, where many respondents ‘were concerned that the draft legislation had the potential to have wider application than the stated target’. This question is of fundamental importance for the UK government as it reconciles its approach to tax avoidance with its objective of being ‘open for business’.

In the House of Commons debate on 17 April, it was interesting to see Michael Meacher MP, who has been one of the GAAR’s fiercest critics, agree that “the most heinous cases will certainly be caught (by the GAAR)”. However, he went on to say that the GAAR, as currently drafted, gives the impression that “virtually everything else is somehow okay and everything else goes”.

Catherine McKinnell MP, for the Opposition, indicated that:

“We support the GAAR and we welcome its being put in place, but we want to see how effective it will be and we will continue to monitor it.”

For the Government, the Exchequer Secretary to the Treasury, David Gauke MP, suggested that there is a need for “a way of ensuring that we do not take a baseball bat to legitimate commercial behaviour ... (but seek to) ... identify the boundary between tax avoidance and tax planning”. However, he went on to confirm that “There is avoidance that will not fall within the GAAR, but which HMRC would none the less take action against”.

Many taxpayers and tax professionals welcomed the new HMRC guidance published on 15 April 2013. Now approved by the Interim Advisory Panel, the guidance includes a broad set of examples including ‘borderline’ examples that, depending on the broader context and particular facts of the case, may fall on either side of the ‘abusive’ line. The guidance provides a set of overriding principles to help identify what is contrived and abusive and practically demonstrates how these terms are to be applied in practice. This seeks to address a number of the concerns raised by the respondents to the consultation.

The future of the GAAR

Whilst it would appear that the proposed GAAR has, for now, attracted a political consensus — at least in the UK Parliament — this is unlikely to be the end of the story. This is demonstrated by the number of Finance Bill amendments tabled and discussed (but not carried) in the recent Finance Bill debate, which included:

► Introduction of a de-minimis test where tax at stake would have to be above a certain amount before the rules could be applied (to limit the impact on small businesses and taxpayers).

► Post implementation review of the scope of GAAR and application of the double reasonableness test and its deterrent effect.

► A possible requirement for UK companies to make a special report of tax schemes which have an impact on developing countries.

There has been significant debate about the question of penalties. The GAAR legislation, as set out in Finance Bill 2013 does not currently include any specific provisions imposing penalties. However, indications were given that by the Exchequer Secretary that “On the penalty regime, we have not ruled out future action to strengthen the deterrent impact of the (GAAR) by attaching penalties if necessary ...”

Whilst, for the time being, there appears to be a consensus based on ‘wait and see’, there can be no certainty over how long this will last. In the meantime, we await with interest the first signs of how the GAAR will be applied in the early months following enactment.

For more information, contact:

Rakhim Mirzayev

+ 44 20 7951 6213 [email protected]

Geoff Lloyd


http://en.wikipedia.org/wiki/Exchequer_Secretary_to_the_Treasury



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Turning the screw on tax avoiders

It has taken years of consultation and various drafts of the legislation before the UK’s new GAAR comes into force from summer 2013. The linked tax and procurement rules, which apply from 1 April 2013, are a late addition to HMRC’s anti-avoidance armoury and the result of a very short consultation lasting two weeks. Companies will now need to consider how they are likely to be impacted by these proposals and what steps they need to take in the future to comply with the rules.

In the future, suppliers who are bidding to win central government procurement contracts will be required to self-certify that there has not been an ‘occasion of non-compliance’ — including a successful challenge under the new GAAR.

The impetus behind this initiative has come directly from media, public and Parliamentary attention on tax compliance and tax avoidance, in particular. Its rationale was summed up by a Government Minister as follows:

“Taxpayers’ money should not fund tax dodgers. So I have asked HMRC and the Cabinet Office to come up with a workable solution ...”

Danny Alexander Chief Secretary to the Treasury, September 2012

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The new rules, which apply to any central government procurement contract of £5mn or more, require potential suppliers to consider whether they have any ‘occasions of non-compliance’ within a designated timeframe. The timeframe will eventually require suppliers to look back a full six years, although (in response to the consultation) suppliers will only ever need to consider amendments made to tax returns after 1 April 2013 in relation to returns submitted after 1 October 2012.

An ‘occasion of non-compliance’ occurs when an amendment is made to a tax return as a consequence of HMRC successfully challenging a taxpayer by reference to the GAAR, the Halifax anti-abuse principle (developed in respect of VAT), or because of the failure of a transaction which was, or should have been, notified under the Disclosure of Tax Avoidance Scheme (DOTAS) rules. Other ‘occasions of non-compliance’ occur when the supplier’s tax affairs have given rise to a conviction for tax related offences or to a penalty for civil fraud or evasion. HMRC has dropped its proposal that adjustments related to Targeted Anti-Avoidance Rules should also be treated as ‘occasions of non-compliance’.

Foreign economic operators bidding will be required to self-certify their tax compliance against the equivalent tax rules in their territory. This raises a question as to what is an ‘equivalent tax rule’. In particular, the proposed UK GAAR is intentionally narrower in scope than that found in many territories and few countries have the equivalent of the UK’s DOTAS arrangements.

HMRC has pointed out that an ‘occasion of non-compliance’ does not mean automatic exclusion from the bid process. Bidders can put forward explanations, such as changes in their tax compliance approach, which will be taken into account as part of the bid process.

In another relaxation of the rules, compared with HMRC’s original consultation, only the ‘economic operator’, that is the bidding company itself or a company brought into that term by virtue of activities to be provided in connection with the bid, needs to self-certify.

The rules do not require an Act of Parliament, and given the start date of 1 April 2013, no further significant changes are now expected in the short term. However, updated guidance is likely to be provided in due course. Furthermore, there will be a review of this policy within a year and the Government has noted that changes may, in particular, be made in the following areas depending on taxpayer behaviour:

► Inclusion of other incidents of non-compliance, for example, specific targeted anti-avoidance rules.

► Inclusion of other group entities in the certification, for example, if bidders use special purpose vehicles to make the bid or take other measures to exclude companies that have had an occasion of non-compliance from being included in the certification.

► Amendments to how the rules apply with regard to overseas taxes.

The new tax and procurement rules are clearly designed as a further deterrent to tax avoidance and potential Government suppliers will be more likely to steer clear of arrangements within the scope of UK GAAR or DOTAS rules which could be susceptible to HMRC challenge. Together with the GAAR itself, this represents a decisive shift away from HMRC’s non-judgemental approach to disclosure. It remains to be seen whether this shift backfires in discouraging large businesses from adopting an open and transparent relationship with HMRC more generally.

All potential suppliers (UK or overseas) to the UK Government will want to review their tax planning arrangements and consider the impact of the new rules and their ability to self-certify in relation to future procurement contracts.


Chris Oates



Crown dependency disclosure facilities

HMRC has created three new facilities to allow UK taxpayers with untaxed assets in the UK’s Crown dependencies — Jersey, Guernsey and the Isle of Man — to make a disclosure and bring their tax affairs up to date.

The disclosure facilities are the forerunner to new tax information exchange agreements. From 2016, these will require banks and other financial institutions in the Crown dependencies to automatically provide information relating to assets held by UK taxpayers to HMRC. The new arrangements represent a significant breakthrough for HMRC which expects to raise an additional £1bn from them over five years.

HMRC has stated that any taxpayer with untaxed assets in Jersey, Guernsey and the Isle of Man will ‘face investigation — including possible criminal investigation — and severe penalties once HMRC gets the new information’. To give taxpayers an opportunity to bring their affairs up to date before HMRC starts to receive information under the new agreements, the new disclosure facilities will run from 6 April 2013 to 30 September 2016.

The format of the new facilities is very similar to that of the Liechtenstein Disclosure Facility (LDF) which also runs until 2016. Many acknowledge that the LDF has been HMRC’s most effective disclosure facility to date, having raised £481mn from disclosures settled up to the end of February 2013. It is, therefore, perhaps unsurprising that HMRC has decided not to deviate far from a successful formula. The key terms of the new disclosure facilities are that:

► Tax is due and payable from 6 April 1999 onwards only (under normal rules, HMRC can assess tax for up to 20 years).

► The taxpayer must have had a beneficial interest in an asset in the relevant jurisdiction at some time between 6 April 1999 and 31 December 2013.

► A fixed penalty of 10% of the unpaid tax will be due (20% from 2008/09 onwards).

► A ’bespoke service‘ will be provided by HMRC including initial anonymous contact and a single point of contact inspector.

► All taxes due can be disclosed through the facilities.

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We would urge taxpayers with untaxed assets to note the clear warning from HMRC and to consider making a disclosure as soon as possible. However, some readers may be surprised to know that even where there is unpaid tax in respect of an asset held in Jersey, Guernsey or the Isle of Man, the relevant Crown dependency disclosure facility may not be the only option. The Crown dependency disclosure facility may be more attractive to many taxpayers as they will be dealing with tax authorities that are more familiar to them. However, taxpayers may also qualify to make a disclosure under the LDF, which potentially offers advantages that the new facilities do not, such as:

► Provided a full disclosure is made, the LDF provides an explicit immunity from criminal prosecution for tax offences.

► A lower penalty for 2008/09 (10% under the LDF, 20% under the new disclosure facilities).

► A Composite Rate Option of 40% covering all taxes for years up to and including 2008/09, and a potentially valuable inheritance tax treatment.

► Up to 10 months to make a disclosure after the date of registration, compared to only six months under the Crown dependency facilities.

Professional advice must, therefore, be taken to consider the facts and determine the most appropriate way forward. It is also interesting to note that a taxpayer does not need an existing asset in the Crown dependencies in order to make a disclosure. As long as an asset is acquired on or before 31 December 2013, a taxpayer can make a UK tax disclosure. This could make the new facilities more flexible than the LDF which requires the taxpayer to have had an offshore asset on 1 September 2009.

The agreements that govern each of the new disclosure facilities all state that a disclosure can only be made by a taxpayer who ‘has not been the subject of an investigation by HMRC that concluded before 6 April 2013 or one that began after that day’. An investigation includes ‘any civil enquiry of any kind this is supported by statutory information powers and is carried out for the purposes of ascertaining whether the UK tax liabilities of a person are correct and up-to-date’. This might suggest that a taxpayer who has ever been subject to an enquiry of any kind would be ineligible, even if the enquiry was completely unrelated to the offshore assets. HMRC has since clarified the position for civil enquiries by publishing an FAQ which states that ‘a person is eligible to participate in the disclosure facility if the person is a relevant person who is not the subject of an ‘in depth’ investigation by HMRC on 6 April 2013 that has not been concluded by that day’. This clarification is helpful but care is still needed to check that an existing enquiry will not prevent a disclosure being made.

HMRC’s efforts to tackle tax evasion are gathering pace and will continue to do so. With three new disclosure facilities available, taxpayers with a disclosure to make should seek professional advice to ensure they choose the most appropriate route.


Robert Osborne

+ 41 58 286 42 99 [email protected]

Jim Wilson


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Legal professional privilege

The Supreme Court’s decision in the Prudential case 1, which was released on 23 January 2013, confirmed that the UK courts would not apply the principle of legal professional privilege to communications between a client and their tax adviser. The ruling was widely anticipated by the accountancy and legal professions alike, and there has been much comment on the judgment — which the Supreme Court itself deemed to be of such significance that seven judges sat rather than the usual five. The decision was reached by a margin of 5:2, and the question that remains is what, if any, are the implications of the decision for taxpayers who take advice on the law from accountants and tax advisers as well as from lawyers.

1 R (on the application of Prudential plc and another v Special Commissioner of Income Tax and another [2013 UKSC1]

The concept of legal professional privilege

Legal professional privilege is a common law concept in England and Wales, with specific application to confidential communications between a lawyer and client in two situations:

1. Legal Advice Privilege (LAP) — protects confidential communications between a client and their lawyer which relate to the provision or seeking of legal advice.

2. Litigation Privilege (LP) — protects confidential communications between a client, their lawyer and any third-party which relate to actual or contemplated litigation.

It is a key requirement of privilege that the advice given is confidential from the outset, and that the lawyer is acting in a professional capacity. Legal privilege belongs to the client alone. It may be lost through the over-sharing of the advice, or if the client chooses to waive it, but generally, once legal privilege applies, it does so indefinitely.

The Prudential case was concerned with the application of LAP, and whether the professional advice that the company sought from its advisers PricewaterhouseCoopers (PwC) should attract LAP, being of the same nature as advice that, when provided by a lawyer, would be covered by LAP. Specifically, the case referred to the giving of advice by Chartered Accountants, but more generally, the court considered whether the concept of privilege could extend to advice provided by someone who is not a practicing lawyer.


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How Prudential approached the principle

Prudential (Gibraltar) Ltd had entered into a disclosable transaction under the advice of their tax advisers. The HMRC officer who was enquiring into the transaction asked for documents regarding the transaction from the company and its parent company, Prudential plc, by issuing the appropriate formal information notices. The companies responded, providing much of the information requested but withholding several documents that they felt that were covered by LAP as they concerned the seeking and obtaining of legal advice by Prudential from their advisers.

The subsequent request by Prudential for judicial review of HMRC’s decision that the withheld documents were disclosable was heard at the High Court, and then the Court of Appeal, before being heard before the Supreme Court. Ultimately, all three courts found against Prudential.

The Supreme Court did not decide whether what Prudential were asking for was extending the breadth of LPP, or was simply identifying LAP’s breadth as applied to provision of advice in current circumstances. The crux of the decision was whether the Supreme Court should hold that LPP applied in these circumstances, given this extended LAP beyond currently understood limits. The majority of the Judges concluded that they should not do so, because this raised matters of policy which should be decided by Parliament.

What now for tax advisers?

Recent comment from the ICAEW president, Michael Izza, suggests that the Institute will continue to push for this issue to receive parliamentary consideration. However, there is no guarantee that Parliament would introduce changes, having turned down the opportunity to debate the issue in the past.

Essentially, at the moment the Supreme Court’s decision has maintained the status quo. So what does this mean for clients who obtain advice on the law from accountants or specialist tax advisers?

Working with the status quo

Although advice provided by accountants and tax advisers will not generally be covered by LAP, this does not mean it is necessarily required to be disclosed to HMRC. HMRC’s powers to obtain information (in the course of an enquiry) are in general limited to information or documents that are ‘reasonably required by the officer for the purpose of checking the taxpayer’s tax position’. This provides some comfort against HMRC engaging in ‘fishing expedition’ requests for information not relevant to the tax risks it is enquiring into.

When the Prudential case was first judicially reviewed at the High Court, as well as the LAP point, an argument was raised that the disputed documents did not contain information relevant to determining the amount of any tax liability. Charles J in his judgement (which found, in this instance, in favour of HMRC), referred to the fact that HMRC themselves “accept that in many cases, pure legal advice will be irrelevant”.

In a similar vein, HMRC makes the point in their Compliance Handbook Manual, at CH22300, when discussing requests for tax advisers’ papers that ‘advice that a person has received from their tax adviser is not usually something that is reasonably required to check the tax position’. However, HMRC goes on to state that they reach their conclusions by reference to the relevant facts, so arguing successfully that a document is not ‘reasonably required’ may not be as clear cut as LAP if HMRC believes that there could be relevant facts within the documents containing tax advice.

For situations where the protection afforded by LAP is sought, accountants and specialist tax advisers often work jointly with lawyers to ensure that LAP is maintained on documents containing legal advice.

So whilst the decision in Prudential has inevitably left some uncertainty over the circumstances in which advice provided by accountants and specialist tax advisers is disclosable to HMRC, there remain a number of ways in which taxpayers can ensure that confidential advice which is not relevant to their tax liability can remain confidential.


Vy Vamadevan


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VAT disputes

HMRC’s Dispute Resolution Unit has recently conducted a survey on experiences of VAT disputes, including appeals to the First-tier Tribunal, in order to consider how Alternative Dispute Resolution (ADR) may be better used in such disputes.

In this article we set out our answers to HMRC’s survey questions:

1. In general, what level of discussions take place between the HMRC assessing officer/decision maker with you/your client before assessments or decisions are issued?

2. Do you consider that the level of discussion is sufficient and if not, what was missing?

3. In general, are you/your client made aware of what a likely decision is before it is issued and do you have a chance to provide input and/or address concerns before the decision is issued?

In our view, the answers to these three questions very much depend on the officer concerned. Frequently, we see officers who are keen to work with our clients to establish a firm factual basis for decisions reached applying the collaborative approach advocated in HMRC’s Litigation and Settlement Strategy (LSS). However, this is not always the case and there are occasions when an officer appears focused on a particular conclusion and issues a decision without discussion with the taxpayer concerned. Increased use of a ‘four eyes’ approach to HMRC

communications and decisions might help in this. Similarly continued training will help officers to appreciate the value of the collaborative approach of the LSS and to be fully aware of, and apply, the relevant guidance. If HMRC could ensure that the LSS is operated consistently in practice, this would be very welcome.

4. Do you generally encourage clients to ask HMRC for a statutory review when you disagree with a decision? If so, why?

5. Why might you not request a statutory review of a decision?

A statutory review can be a useful means of ‘stopping the clock’ to allow for collaborative discussions with a view to resolving disputes. It is now relatively standard for the statutory time limits for a review to be extended by mutual agreement in order to keep matters open when needed for this purpose. We would not generally expect a statutory review to overturn the officer’s decision without such a collaborative process, particularly where the decision turns on a matter of policy or relies on legal advice taken by the original decision-maker. If HMRC is unwilling to engage, we would generally opt to take the case directly to appeal.

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6. Where you/your client have made an appeal to the First-tier Tribunal which was settled before a hearing, what do you consider triggered the settlement?

7. Do you think the appeal referred to in 6) above could have been settled sooner? If so, what would have speeded up resolution of the case?

In most cases, a better understanding of the facts and each other’s respective arguments is what triggers a settlement and would help to ensure settlement at an earlier stage. There are some cases where each side’s arguments and positions are determined early on and a settlement is achieved by a process of persuasion. More frequently, we see cases where the HMRC officer puts the onus on the taxpayer, preferring to challenge the taxpayer’s arguments and waiting until the case is at an advanced stage before developing HMRC’s own reasoning. This can be intensely frustrating and wasteful of time and resource. Where things go well, HMRC officers engage early on in the process, are willing to explore a wide range of potential solutions and work collaboratively in sharing and testing respective arguments. This has a much greater chance of resulting in an early and satisfactory settlement.

8. What do you think about the use of ADR in the context of VAT disputes?

9. Are there types of VAT issues or disputes that you consider would lend themselves (or not) to ADR.

Our experience of ADR (i.e., mediation) for VAT disputes is positive. However, the process is resource intensive and may not be necessary if good collaborative dispute resolution (CDR) practices were applied more generally. This could include greater use of disputes facilitators, on each side, particularly for larger disputes such as those handled by the Large Business Service.

Subject to this, we see no barrier to the satisfactory use of ADR (or CDR) for most types of VAT disputes. This would include factual disputes as well as disputes as to the application of VAT law, and mixed fact and law disputes. We recognise that HMRC will have ‘red lines’ in some areas, such as over a disputed liability issue which is of wide application, but this does not mean that the dispute cannot be resolved most satisfactorily through an ADR or collaborative process, if only in preparation for litigation.

10. What do you think HMRC does well in its handling of VAT disputes?

11. What do you think HMRC could do better in its handling of VAT disputes?

12. If you could change one thing about the VAT disputes process, what would that be?

13. Do you have any other comments or observations in relation to the VAT disputes and appeal process in general that you would like to make.

Where cases are worked collaboratively, HMRC’s handling of VAT disputes is excellent. Experience of a fresh pair of eyes having been brought in to support this process has also been positive and widening that approach out more generally would be beneficial.

As a final point, the current arrangement requiring the taxpayer to bear his or her own costs is a serious concern, particularly where the HMRC officer does not engage collaboratively, such that litigation is the only option. Even in litigation, costs are only available where appeals are categorised as Complex. In practice, this means that there are a wide range of HMRC decisions that taxpayers cannot economically challenge since the cost of running the dispute would represent an uneconomic proportion

of the tax at stake. This has the potential to allow a number of flawed decisions to stand unchallenged.

Summary

ADR has unquestionably been a success and helped resolve a number of VAT disputes which might otherwise have resulted in a tribunal hearing. However, adopting a collaborative approach to resolving disputes at an earlier stage would, in many cases, have led to the issues being resolved even sooner. An increased focus for HMRC officers to adopt the approaches set out in HMRC’s guidance on resolving disputes collaboratively would unquestionably save significant resources for all parties and we hope that HMRC will do more to encourage this engagement in the early stages of compliance checks.


Paul Dennis


Geoff Lloyd


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The Tax Controversy & Risk Management (TCRM) practice at Ernst & Young consists of teams who specialise in the management and resolution of contentious issues and disputes with tax authorities, both in the UK and worldwide, for our financial services clients and clients in other industries.

In addition to assisting with all types of HMRC investigations, TCRM also conducts health checks to ensure that clients’ systems and procedures are robust enough to withstand HMRC scrutiny, should they be selected for enquiry. TCRM also specialises in supporting clients in benefitting from HMRC’s approach to collaborative dispute resolution and ADR.

TCRM includes a number of former senior tax authority officials who have worked in Specialist Investigations (SI), Large Business Service (LBS), Corporation Tax, International and Anti-Avoidance (CTIAA), Local Compliance (LC) and the Dispute Resolution Unit (DRU) within HM Revenue & Customs.

It is for this reason that TCRM has a wealth of insight into the world of tax enquiries and dispute resolution, with a proven track record of steering clients through difficult enquiries and complex negotiations to reach successful outcomes. TCRM works side by side with their subject matter professionals to bring practical and technical expertise to their engagements.

Below are particular areas of specialism that TCRM deal with on a day-to-day basis:

► Enquiry management and resolution

► Tax enquiry clear-ups

► Company residence reviews

► HMRC systems and process reviews

► Tax strategy reviews

► Tax transaction assurance

For further information, please contact one of the TCRM professionals listed below.

What is Tax Controversy & Risk Management?

Ernst & Young’s Tax Controversy & Risk Management contacts UK & Ireland

London and South Chris Oates Partner [email protected] + 44 20 7951 3318Geoff Lloyd Executive Director [email protected] + 44 20 7951 8736 Jim Wilson Director [email protected] + 44 20 7951 5912Andrew Hinsley Director [email protected] + 44 20 7951 1932Rob Brockwell Senior Manager [email protected] + 44 20 7951 2764

Midlands and NorthPaul Dennis Director [email protected] + 44 121 535 2611

ScotlandRob Kernohan Senior Manager [email protected] + 44 131 777 2259

Northern IrelandTom Penman Senior Manager [email protected] + 44 28 9044 3532

Financial ServicesHelen Maddaford Partner [email protected] + 44 20 7951 3466Rob Osborne Tax Manager [email protected] + 44 20 7951 5626

For further information, please contact Vy Vamadevan at Ernst & Young on + 44 20 7951 5567 or [email protected].

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