Tax disputes

The firm’s premier reputation for dispute resolution is carried through to our tax practice. Our combination of tax expertise and litigation experience is a huge benefit to our clients.

Herbert Smith's market leading tax disputes group has a track record for delivering successful outcomes for the taxpayer in the courts and through settlement. Very few matters proceed to litigation even now when HM Revenue and Customs are pursuing their published litigation strategy. We consider this is the direct result of our advocacy and ability to draw on all areas of expertise to persuade HMRC to our view.

We have had three very notable successes in 2008/9, without the necessity of issuing proceedings in this regard:

• successfully defending our clients right to claim the benefit of tonnage tax in relation to the operation of technical ships. In doing so we have persuaded HMRC to our view of the law and they published Business brief 42/09 to announce that change of interpretation;
• persuading HMRC that the correct capital gains tax treatment of a Luxembourg Fonds Commun du Placement is that of a unit trust as a result of which section 103A TCGA 1992 has been introduced by the Finance Act 2009;
• persuading HMRC that the proposed change in 2008 to reinstate an accidental repeal in 2007 of Paragraph 7 of Schedule 33 to the Finance Act 2003 went further than necessary and should be modified accordingly in Finance Act 2008

Our core team comprises partners and associates with expertise in one or more of the following areas: tax, commercial litigation and arbitration, judicial review, human rights, world trade law, European law and financial regulation.  The team is able to draw where necessary on a vast array of legal specialists where required. The objective of the team would be to draw on the vast commercial tax expertise of the team and utilise our commercial litigation skills to reach a speedy settlement so far as possible on terms satisfactory to the client or make the best case for appeal to the Tribunal and/ or the Courts.

In particular we would seek to:

• identify underlying legal issues to undermine HMRC's case, deploying judicial review and human rights arguments, world trade law and other legal specialists as required for that purpose;
• use knowledge of the principles underlying the reform of the Civil Procedure Rules as they apply in civil litigation to the management of cases before the new First-tier and Upper Tribunal, the rules of which (following the abolition of the General and Special Commissioners) incorporate those CPR principles;
• finesse the  presentation of arguments to appeal to the body of judges in the tribunal;
• assist in selection of counsel to ensure the right horse is chosen for the course;
• prepare witness statements and arranging witness familiarisation where necessary;
• identify and appoint appropriate experts where necessary.

“This group “inspires confidence from the outset,” according to its taxpayer client base. It has been a major player in contentious tax matters for over ten years and augments this “great experience of negotiating with HMRC”
Chambers 2009

“a measured and balanced style aimed at achieving the optimal commercial results for clients.” Solicitor advocate Heather Gething heads the group. She brings “an impressive, low-key approach” to matters that ensures “negotiations with HMRC are run smoothly”
Chambers 2009

Shortlisted for the following awards:

• Tax disputes firm of the year, ECJ firm of the year
• Tax team of the year and winner of ECJ firm of the year award
• International Tax Review 2009

Tax Digest
We keep our clients informed of developments pertaining to tax disputes through distributing articles on items of major interest.

Articles published to date in the Herbert Smith Tax Digest are:

		Appeals against conclusions set out in a Closure Notice – HMRC v Tower MCashback (decision of the Court of Appeal) February 2010 (pdf 220k)
		The Finance Act issue: Section 46 and Schedule 23: insurance companies  British Tax Review, courtesy of Sweet and Maxwell, December 2009 (pdf 157k)
		The Finance Act issue: Section 49 and Schedule 25: transfers of income streams  British Tax Review, courtesy of Sweet and Maxwell, December 2009 (pdf 208k)
		The Finance Act issue: Sections 95–98 and Schedules 47–50  British Tax Review, courtesy of Sweet and Maxwell, December 2009 (pdf 173k)
		Accountant's tax advice not covered by legal professional privilege - Prudential v Special Commissioner of Income Tax October 2009 (pdf 160k)
		The Upper Tribunal's power to make determinations of fact on appeal from the First-tier Tribunal British Tax Review, courtesy of Sweet and Maxwell, September 2009 (pdf 150k)
		Claims to legal professional privilege – procedure for resolving disputes with HMRC July 2009 (pdf, 53k)
		Transformation of the tax tribunal  British Tax Review, courtesy of Sweet and Maxwell, July 2009 (pdf 200k)