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Tax

Tax

 

Our public law team are experts in areas of tax law and litigation  that involve principles of public law and judicial review.  We set out the principal areas of our taxation practice below.

 

Application of IR35 to public sector contracts

 

The so called “IR35” is a set out of anti-avoidance measures designed to prevent disguised employment being subject to income tax and national insurance payments by adding a company (or limited partnership) between the client and service provider.  Such structures can secure significant tax advantages because companies are not liable to pay income tax or national insurance.  IR35 contains a set of deeming provisions so that the monies received by the company from the client is treated employment income in the hands of the service provider if, but for the imposition of a company, the nature of the work and the relationship between the contractor and the client would lead to an employment relationship.

 

The Finance Act 2017 passed responsibility for making the assessment from the contracting company to the client, if the client is a public body. 

 

We have found since this change that many public sector organisations have attempted to implement blanket policies that treat all locum and temporary work as caught by the new measures – and thus regarded as employment relationships – without conducting any enquiry into the circumstances of the particular contractual arrangement.  Any such “blanket” policies assessments are likely to be unlawful. 

 

We have acted successfully for Locum Doctors Union in connection with overturning a decision by NHS Improvement to direct all NHS bodies to regard locum work as falling inside IR35 and we are advising other clients who have had adverse determinations made regarding their employment status with public sector bodies.  Contact us if you believe that your IR35 or employment status has been wrongly assessed by a public body. 

 

Accelerated payment notices and the  DOTAS tax avoidance regime

 

Accelerated Payment Notices were created by the Finance Act 2014 and augment HMRC’s anti-avoidance powers contained in the Finance Act 2014, which created the “DOTAS” reporting scheme.  DOTAS requires participants in certain tax avoidance schemes to disclose their participation in the scheme to HMRC.   Not all APNs will apply to arrangements that relate to DOTAS schemes but they often will do so.

 

Accelerated Payment Notices are statutory notices that require payment of disputed tax up front before a tax payer’s claim has been determined.    The tax will be returned to the taxpayer if the taxpayer is ultimately successful but failure to take action in respect of the notice will lead to penalties and enforcement action.  If you receive a APN then you should take advice urgently.  You have the statutory right to provide written representations to HMRC regarding the notice within 90 days but we strongly recommend that you take urgent legal advice before entering into an correspondence with HMRC. 

 

There is no appeal to a tribunal in respect of HMRC’s decision to serve an APN but the decision to issue a notice may be challenged by judicial review.

 

We can provide advice regarding the contents of the APN and make representations to HMRC on your behalf.  We can also advise in relation to a claim for judicial review in respect of HMRC’s decision to service a APN.

 

We can also advise in relation to Follower notices.

 


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