Persistence pays off: A Decade-Long Battle with HMRC

Client: Investment banker
Wider Advisory Team: Accountants (private client and non-dom specialists),trustees of the trust (Jersey-based), advisors (big 4 accountancy firm)
Matter Considered: Tax residency and domicile status for UK non-domiciled individual working in the Middle East.
Client’s Position:

The client maintained that he was not UK resident or domiciled across three tax years and was not liable for UK tax on his employment income.
The client was successful in his arguments for years 2 and 3, however, HMRC error meant that they forgot to deal with deal one and refused to engage with the client‘s requests to do so.
We raised legal arguments that HMRC‘s position was unfair which led to them agreeing to discuss the issues in the first tax year, more than a decade after the event.
This allowed us to ask for the matter to be mediated. We then presented arguments based on the residency and domicile rules at the time (which were more favourable to taxpayers) and agree that the tax should be returned plus interest.
The case involved a complex interplay of tax residency, domicile, and employment law principles.
The passage of time presented significant challenges in obtaining necessary documentation.

Role Played:

Strategic Advice: Developed a comprehensive strategy to challenge HMRC’s position and protect the client’s interests.
Legal Representation: Provided effective legal representation for the complaint, judicial review proceedings and mediation
Advocacy: Persuaded HMRC to reconsider their stance on the matter and engage in meaningful dialogue.
Information Gathering: Collected and analysed evidence to support the client’s position, despite the passage of time.

Impact on the Client:

Successful Resolution: Secured a favourable outcome for the client, resulting in a return of funds and interest.
Re-establishing a dialogue between taxpayer and tax authority: After years of being ignored, the client was finally heard and a better relationship with HMRC was formed.
Financial Compensation: Obtained his legal costs as compensation for HMRC’s mishandling of the matter.

Summary: This case demonstrates Morag‘s expertise in handling complex tax disputes and her commitment to providing exceptional legal representation for her clients. By leveraging her deep understanding of tax law and her strategic approach to disputes, she was able to successfully navigate a decade-long dispute and secure a favourable outcome for our client.

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