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A brief encounter with CIOT London branch
Editor John Stokdyk explored some of the more obscure corners of tax law and the Inns of Court at the CIOT's annual London bash.
The CIOT’s London branch is an interesting bunch. An invitation to its annual dinner presents an opportunity to mingle with some of the country’s leading tax barristers, lecturers, authors and other experts.
The rarefied nature of the gathering was emphasised by new branch president Paula Tallon’s choice of venue for the dinner, at Inner Temple Hall on Tuesday night.
The evening started with a lecture from legal academic and QC Philip Baker, who livened up a survey of taxation and human rights with plays on exotic case names and details (truly “Shcohkin” in one notorious Ukranian dispute), dodgy accents and a string of jokes. Baker’s knockabout delivery lightened the mood, but he also touched on issues of substance that were likely to influence UK tax tribunals.
His basic premise was to explain how several articles of the European Convention on Human Rights opened the door for tax cases to be heard by the Strasbourg Court. The ones to note include:
- Article 6 (right to a fair trial)
- Article 1, first protocol (right to enjoyment of property)
- Article 14 (non-discrimination); and
- Article 8 (right to privacy).
As a rule, assessments of tax rates are deemed to be administrative affairs outside of the ECHR’s remit, but where acts by tax authorities undermine the taxpayer’s right to a fair trial, the court will consider appeals under Article 6.
This principle also extends to tax penalties (including surcharges on farm animal levies following the Steininger v Austria case), which the court decided were criminal matters that demanded a presumption of innocence and a higher standard of proof, as set out in the Jusilla v Finland decision last year. This point has been increasingly cited in UK tax penalty reasonable excuse cases.
Taxpayers need to establish that there is an excuse, Baker advised, and having done so, HMRC has to prove beyond a reasonable doubt that it was not a valid one.
A ruling in the recent Chambaz v Switzerland case protected the appellant’s right not to incriminate themselves by disclosing information to the tax authorities. However a challenge by two French lawyers who argued that they had a right not to complete tax returns that could potentially incriminate them failed.
“Increasingly, tax laws have been challenged on grounds of lack of clarity,” Baker said and in Shchokin v Ukraine, the taxpayer won because there were two conflicting laws setting out how much tax was due.
“The rule of law is a golden thread running through the convention, and law must be understandable if it is to be enforced,” Baker said. “When I told a group of VAT tribunal judges about this, they all laughed because none of them had ever seen a piece of VAT legislation that was understandable.”
After a pleasant dinner in the oak-panelled hall and an entertaining turn by seven choristers from Temple church, CIOT president Patrick Stevens returned to the theme of tax law when he urged volunteers to come forward to get involved with the institute’s technical committees advising on various tax law consultations.
“So much tax law goes through consultations, which means better laws and fewer surprises on Budget day,” he said. “Looking at the surprise announcements this year - pasties, static caravans, charitable giving - I suspect there should be lots more of that in future years,” he quipped.
As is often the case in top tax circles - it’s the way they tell ‘em.