Thread by @keithmgordon

Considerable concern has been expressed in relation to the reliability of HMRC’s lists of wins in “avoidance” cases.
Without undertaking a full analysis of HMRC’s list, the following points are worth making.
gov.uk/government/pub…

These cases do not limit themselves to cases which consider whether the “avoidance” scheme works but to all cases where avoidance might be in the background.

As we have seen, however, by HMRC excluding IR35 cases, the definition of “avoidance” is extremely subjective. (Actually, it demonstrates why the term is so unhelpful: a taxpayer found to be outside IR35 is by definition NOT avoiding tax whereas a taxpayer caught by IR35 is.)

For example, my own case of Atherton concerned only the procedural question as to whether a discovery assessment was valid. It had long been accepted that the underlying arrangements were ineffective.

If HMRC wish to include that case as one of their wins, then fine: that’s their prerogative.

However, consistency would require them to include the losses they suffered in Tooth which concerned almost exactly the same issues (and in relation to the same scheme).

Those Tooth losses should have been reflected in the 2016/17 (First-tier) and 2017/18 (Upper Tribunal) statistics. Their loss in the Court of Appeal will also need to be reflected in the 2019/20 statistics in due course.

For the same reason, HMRC should have included their defeat in Hicks (2017/18), a case where I represented the taxpayer.

In relation to another case where I represented the taxpayer, in their 2017/18 list, HMRC include their win in Mabbutt.

That case concerned the simple question as to whether an enquiry opened into the year ended “6 April 2009” was valid when it should have been opened into the year ended “5 April 2009” – again, the alleged tax avoidance was very much in the background.

But if they were to include the case when they won a hearing, they should also have included the previous decision in 2016/17 which they lost.

Another omission from the 2018/19 list is the case of Patel which is widely believed to be an avoidance case – which is why HMRC were so determined to engage two counsel to argue a point that had been settled a few years below.

It was widely expected that HMRC would lose their further appeal to the Upper Tribunal (and therefore next year’s 2019/20 statistics) might have been marred. However, it appears that HMRC have spared themselves some blushes as it looks as if they have withdrawn their appeal.

"There are three kinds of lies: lies, damned lies, and statistics. And then there are HMRC statistics."