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Tax Disputes & Investigations (Dispute Resolution)

Tax Disputes and Investigations

The Tax Disputes and Investigations team provides multi-disciplined legal advice on direct and indirect tax disputes, employment-related taxes and civil and criminal tax investigations. 

We understand that tax, and specifically the payment of tax, affects every business and individual and navigating HMRC and its processes can be difficult. Our team has direct experience of working within HMRC and can assist you in reaching a satisfactory outcome, through both litigation and other methods of dispute resolution. Should clients find themselves facing an aggressive tax collection strategy, our specialist team is often able to secure the correct outcome at an early stage through negotiating with HMRC and/or pursuing litigation.

Tax investigation lawyers

Our team includes former senior members of HMRC's Solicitor's Office, barristers and solicitor advocates, a former tax inspector and Chartered Tax Adviser, as well as tax technicians. The team has a strong reputation in acting for long-standing clients and high net-worth individuals in complex tax disputes, as well as being able to harness our network of intermediaries (internally and externally) to assist with any tax issue. We frequently advise clients from a range of sectors including the automotive industry, retail, technology/IT services, recruitment, sport, fashion, food, as well as corporations, local authorities and charities.

Most clients want to settle disputes promptly and commercially, without litigating matters and this is always our first priority. However, when this is unavoidable, we are never afraid to litigate and have vast experience of taking conduct of high profile and complex disputes at all levels, from the Tax Tribunal through to the Supreme Court and the Court of Justice of the European Union. We are able to offer our team's own advocates, rather than instructing outside counsel, to represent clients before the Court, adopting a streamlined approach to all aspects of dispute resolution.

Whilst the team has experience in proactively litigating matters, we also encourage our clients to explore Alternative Dispute Resolution, mediation and other methods of settlement. We have found that this is an effective measure in creating a dialogue with HMRC and understanding the issues in dispute within a much shorter timescale. 

Key Services

The team are experts in VAT disputes, and are able to utilise in-depth knowledge of the VAT law and procedure in order to resolve disputes effectively.

We are frequently involved in technical VAT disputes, in particular disputes relating to single/multiple supplies, business/non-business supplies, the VAT consequences of employee incentives, allegations of tax fraud (including Missing Trader Intra Community fraud), the application of VAT exemptions and zero-rated supplies and issues concerning best judgment.

In addition, we are able to assist clients in understanding the implications of tax assessments, determinations and penalties and identify the correct steps to take in order to mitigate any liability. 

National Minimum Wage disputes

Following our successful advice to the retailer Iceland Foods Limited, we continue to advise clients from the retail sector. Following the re-introduction of penalties and HMRC recommencing enforcement of NMW, the team advises issues such as the operation of salary sacrifice schemes, uniform policies and unpaid working time. We are able to assist clients by navigating the enquiry stage and engaging in a dialogue with HMRC to ensure matters are resolved before being issued with a Notice of Underpayment. 

IR35 compliance checks

The team has successfully worked alongside the firm's Employment and Private teams with IR35 disputes and compliance checks. 

Given that IR35 is ever evolving, it is essential for the team to keep up-to-date with developments in legislation and guidance to consider any impact on our existing clients. We have been able to work alongside our clients, their HR teams and Financial Officers, to first determine whether workers have been correctly categorised as employees or self-employed, and then to assist in implementing procedures to ensure that the businesses apply the rules correctly.

COVID-19 support schemes

The team has developed expertise in COVID-19 related support schemes, particularly the Coronavirus Job Retention Scheme (i.e. the furlough scheme). Due to the urgent introduction of the furlough scheme, there was limited guidance available to employers in understanding how the scheme worked in practice. As a result, employers may find themselves in difficultly, particularly when inadvertent breaches of the scheme occur without their knowledge.

The Tax Disputes team can assist clients in navigating through the furlough scheme rules and we are able to identify when potential errors have been made when applying the scheme rules and will consider whether a voluntary disclosure should be made to HMRC. The extension of the furlough scheme resulted in collaboration with the firm's Employment group, in preparing voluntary disclosures for employers, to avoid paying significant penalties and receiving nudge letters from HMRC.

HMRC can challenge a client's residence and domicile status, which can often be very substantial, complex and fact-sensitive matters that need a careful, principled and highly tailored approach. The team have acted for a number of clients in relation to residence and domicile enquiries at different procedural stages, and have the capability of navigating these technically and strategically complex disputes.

Often clients have been referred where their accountants have been unable to make progress with HMRC at the enquiry stage. The team then leverage technical expertise and extensive experience to unlock the dispute, with a view to reaching a cost-effective resolution for the client.

Disputes most often start their lives with an intervention from HMRC. If handled correctly at that early stage without prompting, the risk and the cost of litigation can be vastly reduced or avoided altogether. We act for clients subject to enquiry under HMRC's Code of Practices 8 and 9 (COP8 and COP9), allegations of tax avoidance and tax evasion, as well as less serious enquiries. Our mindset is to seek the best possible outcome whilst balancing risk and commercial considerations. We also are adept at making proactive disclosures of tax irregularities to HMRC.

HMRC's Customs and Excise function has wide-ranging investigatory powers in relation to all goods imported into the UK. These powers include assessing the veracity of customs declarations on the arrival of goods in the UK and investigating goods at a post-clearance stage. These checks determine whether HMRC believes the correct amount of import duty has been declared and, in turn, the correct import VAT has been accounted for. In certain circumstances they may even seize the goods until their investigation is complete or on payment of what they consider to be an appropriate deposit. 

This area is governed by a complex matrix of EU and domestic legislation and guidance. The Mishcon team has experience in working with both importers and clearing agents in challenging HMRC's decisions. This work can involve purely legal arguments but may also require technical, industry-specific, expert evidence (particularly when challenging the correct classification of goods for import purposes). We are well versed in developing our own legal argument, instructing outside Counsel where appropriate, and instructing and working with experts in various fields in order to drive the best outcome for clients subject to customs demands from HMRC. 

Our team of advocates can represent clients at all levels, from the First-tier Tax Tribunal to the CJEU.

As the advocates in the litigation, we are best placed to assess how a case should be prepared from the outset and what procedural steps need to be complied with. We are involved in evidence gathering process and work closely with witnesses to ensure that witness statements are full and complete and witnesses are prepared for cross-examination.

Our experience in dealing with technical issues means that we can guide clients through a fraught and complex process, taking on the burden from the client and dealing with the tax litigation from its inception. 

The team are experienced in dealing with disputes relating to a range of taxes, including but not limited to VAT, income tax, corporation tax, capital gains tax;

If you disagree with a decision, assessment or determination made by HMRC, we can assist you by challenging this matter through the Tax Tribunal to the European courts, resolve this through Alternative Dispute Resolution or mediation, as well as bringing a legal challenge by way of judicial review.

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