UK Law Firms Seek Government Assurances On New Tax Disclosure Rules

by Robert Lee, Tax-News.com, London

02 June 2004

Several of the UK’s leading law firms are seeking the right to be excluded from the retrospective element of the government’s new tax minimisation scheme disclosure rules, it has emerged.

The new rules will compel tax advisors from August 1 this year to begin supplying the Inland Revenue with information relating to tax planning schemes or advice that they have sold to their clients.

However, as the rules are effective from the government’s announcement on March 18, firms will be required to tell the Revenue about any schemes sold to clients in the meantime, although the tax and accounting industry remains somewhat uncertain as to the specific information required by the new tax department.

According to a report in the Financial Times, tax partners from law firms such as Allen & Overy, Clifford Chance, Freshfields Bruckhaus Deringer, Linklaters, and Slaughter and May held a meeting last Friday, at which it was decided that more clarification surrounding the new rules should be sought from the government in order to ensure that the rules are applied fairly, and that London’s reputation as a leading financial centre is left undamaged.

Patrick Mears, head of tax at Allen & Overy, was quoted by the FT as announcing that:

"We will make the case that until the legislation is clear, and until we have got an opportunity to put in place our own procedures...there should not be retrospection for us."

A Revenue spokesperson commented that the disclosure rules did not distinguish between law firms and other professionals dispensing tax advice.

Recommended