Inside and Outside the Law - Movies, Brexit and Tax Schemes

They say that August is a dead month for news. Still, a few commercial and private client lawyers might have choked on their Bouillabaisse upon hearing of HMRC's announced consultation on a proposal for sanctions against those who "design, market or facilitate the use of tax avoidance arrangements which are defeated by HMRC".

In the Today Programme after the announcement, the focus was on financial advisers and on accountants as the lined up target "middlemen".

However, this ignores the lawyer's role in the tax planning industry. Accountants do the numbers, but lawyers are the wordsmiths and the primary interpreters of what mitigation schemes can legitimately be put in place under tax legislation at any time.

Given that the penalty for infringement could be up to 100% of the underpaid tax, the wordsmiths will be watching carefully for further developments. 

Statue of Sir Francis Bacon in Gray's Inn

Statue of Sir Francis Bacon in Gray's Inn

In the aftermath of the EU referendum result, the "R" word has appeared again in so far small ripples around the City. The heart of financial performance for most City firms is transactional work, whether in corporate, banking or commercial property. Uncertainty stifles transactional commitment by clients. 

Litigation work is not a substitute, partly as the outturn of a claim is more likely to be settlement than days in court. So for some firms, a targeted redundancy round becomes inevitable.

And for how long will this uncertainty continue? Who knows, but both crowing Brexiteers and carping Remainers might take note of a recent FT article that suggested that what we should continue to watch is exchange rates.

The reason is that exchange rates reflect what the world thinks about our currency. and therefore financial health. Presently rates for both the Dollar and the Euro remain some way below their pre-Referendum level...

Amongst the doom stories, occasionally there is a revitalising human interest one. In a story reported by the Lawyer2B online magazine, we learnt about Alex Sprake. Alex was set on a career in professional football , eschewing serious academic study at school.

However, when injuries and loss of confidence held him back, he re-took his A levels and went on to study law at University. After what seems like remarkable chutzpah to get work experience opportunities, he has secured a training contract at a leading law firm. 

Maybe one day there will be a movie centred on Alex's achievements, though we will not have to wait so long before the next lawyer film. Shooting is reported to be starting in early 2017 for Cravath - The Movie. Eddie Redmayne will play the part of Paul Cravath, a young lawyer hired by George Westinghouse in a late 19th century claim by Thomas Edison over the alleged violation of a lightbulb patent held by Edison.

Cravath went on to become a name partner in the premier US firm of Cravath, Swain and Moore. The firm does not have a substantial presence in London, but its profile is likely to be that much higher after the star of The Danish Girl and The Theory of Everything has strutted his stuff. 

Somehow, though, I think we are still some way off "A Day in the Life of a Residential Conveyancer."

Colin Davey is a City of London Guide, City of Westminster Guide, National Trust Guide, and former City law firm partner. He specialises in walks and tours of courts centred on the broad theme of Legal London.

 

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