Advice Regarding Tax Litigation

Gary Green
Gary Green
June 6, 2024

The term “litigation” is used to refer to a tax dispute’s resolution when a statutory appeal is made to a court or tribunal. It includes, also, common law tax-related claims to the court, or an application for a judicial review.

All financial transactions made by companies and individuals involve tax. Therefore, it is absolutely essential to obtain professional advice regarding taxation law in order to manage your assets correctly and save yourself money. The way in which your business structures and shareholders are organised will have a direct implication on your tax liability, and you need to achieve the right balance between preserving your wealth and protecting yourself against any potential risks.

As tax law is constantly in a process of change and evolution, it is vital to stay up to date with the latest regulations and to make sure that your accounts remain in line with legislation. As tax avoidance is increasingly being looked into by HMRC, it is imperative to take advice regarding tax litigation so that you can guard yourself against possible penalties.

Types Of Tax Litigation

Although the majority of legal tax work remains non-contentious, tax lawyers that work for HMRC are involved in the investigation of potential legislation breaches, and either defending cases on the government’s behalf or prosecuting companies or individuals.

Tax laws fall into several categories and include those surrounding:

  • Income tax
  • Capital gains tax
  • Property tax
  • UK inheritance tax
  • VAT (Value Added Tax)
  • Non-profit tax

What Do Tax Lawyers Do?

A tax lawyer who acts for private clients advise them regarding their potential tax liabilities, for example, when they buy or sell assets or other transactions, and advise them about the best ways of mitigating those liabilities.

Meanwhile, tax lawyers acting on behalf of companies will typically work alongside other legal teams as just one component of larger deals since virtually every commercial transaction comes with tax and legal ramifications. A tax lawyer may advise about the tax implications associated with property transactions, mergers and acquisitions, and restructurings along with other financial matters such as debt, equity, and funds.

Tax lawyers who work specifically for HMRC advise about how new laws can be applied regarding taxation – something that occurs on a fairly regular basis. They may also defend any cases that are brought against the UK government.

A civil dispute can arise in relation to tax between two opposing parties and, quite often, the tax adviser finds themselves in a challenging position since their own actions or advice may form a central element of the case. In circumstances like this it is important for their view to be unbiased.

Therefore, seeking expert, independent professional advice from the tax perspective is crucial in such cases, so that individuals can gain a better understanding of the potential tax consequences that could arise should the dispute play out in different ways. A tax dispute can have serious consequences, with high penalty payments often being levied, or even, in some cases, criminal charges. Therefore, getting advice quickly is essential to manage the risks.

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