Tax Disputes & Investigations - Recent Work
This is a selection of the cases handled by the team which have been reported. Much of our work (we are pleased to announce) settles to our clients' satisfaction without a hearing being necessary.
Liechtenstein Disclosure Facility
McGrigors are advising the Liechtenstein Bankers Association on how its members comply with the terms of the tax amnesty introduced for UK taxpayers who bank in Liechtenstein. In particular, McGrigors are advising the banks on how they comply with their obligations to identify clients who may have UK tax issues, and can qualify to use the "Liechtenstein Disclosure Facility". The LDF applies not just to existing clients of the banks and fiduciary companies in Liechtenstein but also to certain types of new clients who begin to bank there over the next five years. Under the LDF, HMRC agree to forgive all tax liabilities prior to 1999. Normally the look back period is 20 years.
HMRC v Weald Leasing Ltd [2008] STC 1601
McGrigors were instructed to represent a subsidiary of a major financial institution, Weald Leasing Limited ("Weald") in defending an appeal by HMRC to the High Court. HMRC's appeal was against a decision of the VAT and Duties Tribunal, allowing an appeal by Weald against an assessment to VAT. Weald was successful in its appeal and a decision in favour of Weald was given by Lindsay J in January 2008. The case is reported at [2008] STC 1601. The Weald decision is one of the most significant cases focusing on the "abuse doctrine" in relation to VAT and the line taken by HMRC is consistent with its policy to robustly challenge any case where it perceives there to be "tax avoidance". The robust defence mounted by Weald against this attack from HMRC is highly significant in terms of being one of very few cases of significance in relation to abuse/avoidance to have gone against HMRC in the past two years. The case has been referred by the Court of Appeal (October 2008) to the European Court of Justice.
FIDS Group Litigation
McGrigors represents a group of over a hundred of the country's largest pension funds seeking nearly £1.5 billion in tax credit reclaims from HMRC, with litigation proceeding innovatively in both the High Court and the tax tribunals. This is one of the largest in terms of the number of claimants of all the High Court GLOs. A group litigation order is in place and the lead claimant is the BT Pension Scheme. There will be a hearing before the new Tax Tribunal in October 2009.
VAT Interest Cars group litigation order
Over two hundred and fifty automotive businesses have taken their fight for full compensation on overpaid VAT to the High Court. Hundreds of millions of pounds of unlawfully collected VAT, stretching back to 1973, have been repaid by HMRC. However, only statutory, simple interest at a low rate has been paid on the rebates. The businesses argue that they are entitled to full commercial interest calculated on a compound basis. The businesses have brought proceedings before the High Court as well as before the VAT Tribunal. The test cases were heard in the High Court in February 2009 and will be heard in the Tribunal in June 2009.