Tax

In a nutshell

Tax lawyers ensure that clients structure their business deals or day-to-day operations such that they take advantage of legal breaks and loopholes in tax legislation. Although predominantly an advisory practice area, on occasion matters can veer into litigation territory.

Tax lawyers in private practice

Handle tax planning for clients, making sure they understand the tax ramifications of the purchase, ownership and disposal of assets, including advice on structuring corporate portfolios in the most tax-efficient way.
Offer transactional advice when working with corporate and other lawyers on matters such as an M&A deal, a joint venture or the acquisition of a large property portfolio.
Deal with investigations or litigation resulting from prosecution by Her Majesty's Revenue & Customs (HMRC). Litigation is always conducted against or brought by the government.

HMRC lawyers

Investigate companies and bring prosecutions.
Advise on how new laws apply to different situations.
Defend cases brought against the government.

The realities of the job

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This is an intellectually rigorous, rather cloistered area of law and ideally suited to the more academic.
Corporate tax lawyers are very well paid, treated with reverence by their colleagues and find intellectual stimulation in their work.
Lawyers must not only have the ability to translate and implement complex tax legislation, but also be able to advise how to structure deals in a legitimate and tax-efficient way to avoid conflict with HMRC.
If you don’t already wear specs, expect to after a couple of years of poring over all that black letter law. The UK has more pages of tax legislation than almost any other country, and there are changes every year.
In time, extra qualifications, such as the Chartered Tax Adviser exams, will be useful.
It is not uncommon for lawyers to switch between government jobs and private practice. Some tax barristers were once solicitors.

Current issues

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There’s been an increased focus on debt restructuring and equity raising.
Funds work remains active. The restructuring of existing funds, launches of new funds and increases in capital flow all have tax consequences.
The fall in transactional work during the recession paved the way for other areas such as advisory and litigation to come to the fore. The significant savings achievable mean that tax lawyers’ advice is valued more highly than ever.
Changes to corporate taxes – for example the decrease of the main tax rate to 26% – and the introduction of anti-avoidance tax legislation have been keeping tax lawyers on their toes.
Law firms have come into their own in relation to tax advice. Pre-Enron it seemed accountancy firms were taking over. However, companies now prefer to take advice from sources independent from their auditors.
The 2011 budget contains several measures aimed at clamping down on tax avoidance. These include the tightening of capital gains rules and an end to disguised remuneration -- a method of paying employees by means of non-repayable tax-free loans.
HMRC has introduced several ‘amnesty’ style initiatives, such as the Liechtenstein Disclosure Facility, the Offshore Disclosure Facility and New Disclosure Opportunity – these have resulted in over 50,000 voluntary disclosures of unpaid taxes.
Criminal prosecutions over tax evasion have been in the increase, as part of HMRC's drive to quintuple the number of cases it brings.
In recent years resources have been focused mostly on prosecution of indirect fraud – like carousel fraud – over and above direct tax fraud.