Advocacy: some practical aspects of tax appeals

Article Abstract:

Tax accountants are frequently called upon to deliver tax appeals and protests before tax courts in Great Britain. Since these appeals are oral, tax accountants should be prepared for the public speaking aspects of the appeal as well as the tax and legal aspects of the protest. The British tax appeal process is described in terms of the seven preliminary appeal procedures, three procedures involved with delivering the appeal and nine points to follow in general. Among the nine points to follow, tax accountants are warned: (1) to avoid leading questions, (2) not to rely on a two-day hearing, (3) to review the case law cited by the examiner prior to the appeal, (4) to solicit the services of a qualified associate during the appeal process, (5) to cut the upper right corners of all documents to be used in the appeal (in order to facilitate keeping papers in order), (6) to begin the final paragraph of the written appeal with the phrasing, 'The question of law for the opinion of the court is . . .', (7) to address their appeal to a single commissioner, as only one will be appointed to each appeals case, (8) to familiarize themselves with the Tax Act of 1970, and (9) to expect the involvement of the Institute of Directors only when the appeal has a sufficiently large base of interest and application.

Services, Tax administration and procedure, Tax administration, Accounting firms, Accounting services, Accountants, Tax appeals, Tax courts

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Some advice for advisers

Article Abstract:

The House of Lords' approach to tax avoidance in several recent decisions is discussed. The Lord Justices place two pre-conditions to establish tax avoidance: there must be a pre-ordained series of transactions, or a single composite transaction, and steps must be inserted into the transactions which have no commercial purpose other than the avoidance of tax. Courts appear to be divided over the interpretation and application of this formulation. One interpretation is that the courts should analyze a transaction with several steps as a single transaction. The other interpretation is to identify the 'pure' tax avoidance steps in a pre-ordained chain of transactions, striking out the tax avoidance steps where they are circular, and rewriting the transaction where the tax avoidance steps are part of a linear 'chain' of pre-ordained transactions.

Cases, Laws, regulations and rules, Tax planning

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Sometimes it pays to be tough with the Revenue

Article Abstract:

The biggest problem for accountants dealing with a back duty case in Britain is deciding what the probable outcome would be if the case were brought before the commissioners. In back duty cases, although the burden of proof lies with the Revenue, it is very easy for the Revenue to assume fraud. An example of this is given in the case of Les Croupiers Casino Club versus Pattinson. The example indicates that circumstantial evidence is sufficient for the Revenue to assume loss of tax; however, even the Revenue may not be able to support the amount of the assessment and there may be some merit in not cooperating with the Revenue. In cases where the amount of money involved is small, the assessment is often overly generous to the Revenue. The real problems arise when the commissioners refuse to look at the evidence.

Management, Taxation, Corporate taxes, Auditing, Corporations, Financial statements

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