HM Customs Research Articles

The employment implications and tax status of English football referees: Commissioners for HM Revenue and Customs v Professional Game Match Officials Ltd [2021] EWCA Civ 1370

In September 2021, the Court of Appeal in England and Wales delivered its judgment in the case of Commissioners for HM Revenue and Customs v Professional Game Match Officials [2021] EWCA Civ 1370 (hereafter PGMOL). The case concerned the employment status of referees who officiate in the men's professional game. The First-Tier Tribunal of the Tax and Chancery Chamber (FTT) had allowed PGMOL's appeal against the Revenue's determination that a certain class of part-time referees were the employees of PGMOL under s. 4(1) of the Income Tax (Earnings and Pensions) Act 2003, and that income tax and employer's national insurance contributions should be deducted from the payments that PGMOL made to them in 2013–2016. On the Revenue's appeal, the Upper Tribunal (UT) upheld the FTT's decision on 6 May 2020. The Revenue further appealed.

Methodological developments in administrative data linkage for cross cutting policy relevant research: Working towards a sustainable data pipeline

ObjectivesDevelop administrative linkages within a national Trusted Research Environment (TRE) that hosts Longitudinal Population Study (LPS) data for over 20 LPS. We will describe the methodological development carried out to enable linkage to administrative datasets. These linked administrative data will support research for public good, informing policy and practice.
 MethodsThe first sets of administrative data under consideration in this Feasibility Study are from the Department of Work and Pensions (DWP), the Department for Education (DfE) and HM Revenue and Customs (HMRC). Working with UK Government departments through a Task & Finish group we have gathered input from DWP, HMRC and DfE and Office for National Statistics (ONS) data sharing experts. The Task & Finish group identified three pragmatic data linkage and data sharing models, that would enable data to be linked via a newly designed secure data pipeline in a legal, secure, and trustworthy manner for all stakeholders.
 ResultsTo encourage sustainability and acceptability, a model designed to be maintained over a long period is based on the re-use of Departmental Personal Identifiable Information (PII) – i.e., name, date of birth, gender, National Insurance number - and attribute data already deposited by the Departments into ONS. ONS will develop for the linkage and extraction of ONS Data into the TRE a system which conducts, and quality assesses the linkage; minimises the Departmental data to participants within the TRE only and the variables specified in the agreements; and, de-identifies the data to their DEA processing standards. The minimised and functionally anonymous data extract will be securely transferred for ingest and integration into the TRE enabling researchers to address a wider range of questions for public benefit.
 ConclusionThis is a model for efficient and low-burden linkages to inform cross cutting research. It will form part of a responsive UK data science capability which can inform government research needs and be used to meet future crisis e.g. new pandemics, the impacts of climate change or economic shocks.

Re-internationalization and Firm’s Post-re-entry Performance: The Role of International Heritage

This paper studies the drivers of re-internationalization to export market and post-re-entry performance from the perspective of international heritage. We develop a conceptual framework to explain how three key aspects of international heritage (firm specific competitive advantage, market and product diversification strategies, and overall exporting experience) as well as firm’s time-out period drive re-internationalisation. Using granular trade transaction-level firm exports data from UK HM Revenue & Customs linked with profit records for 2002-2013, we found that, despite their inter-relationships, re-entry and post-re-entry performance are driven by different mechanisms, and therefore, the same factor may influence them differently or even in an opposite direction. In other words, what increases the chances of firm’s re-entry, may prove to be detrimental for their performance and vice versa.

Child poverty and children entering care in England, 2015–20: a longitudinal ecological study at the local area level

BackgroundChildren in care face adverse health outcomes throughout their life course compared with their peers. In England, over the past decade, the stark rise in the number of cared-for children has coincided with rising child poverty, a key risk factor for children entering care. We aimed to assess the contribution of recent trends in child poverty to trends in care entry.MethodsIn this longitudinal, ecological study of 147 local authorities in England, we linked data from the Department for Work and Pensions and HM Revenue & Customs on the proportion of children younger than 16 years living in families with income less than 60% of the contemporary national median income, before housing costs, with Department for Education data on rates of children younger than 16 years entering care. Using within-between regression models, and controlling for employment trends, we estimated the association of changing child poverty rates with changing care entry rates within different areas. Our primary outcome was the annual rate of children younger than 16 years starting to be looked after by local authorities in England.FindingsBetween 2015 and 2020, controlling for employment rates, a 1 percentage point increase in child poverty was associated with an additional five children entering care per 100 000 children (95% CI 2–8). We estimate that, over the study period, 8·1% of the total number of children under the age of 16 entering care (5·0–11·3) were linked to rising child poverty, equivalent to 10 351 (6447–14 567) additional children.InterpretationWe report evidence that rising child poverty rates might be contributing to an increase in children entering care. Children's exposure to poverty creates and compounds adversity, driving poor health and social outcomes in later life. National anti-poverty policies are key to tackling adverse trends in children's care entry in England.FundingNational Institute for Health Research (NIHR) School for Public Health Research, NIHR Public Health Policy Research Unit, Swedish Research Council, Wellcome Trust, Medical Research Council, and NIHR Applied Research Collaboration North West Coast.

Saving tax on renovations

While improvements and renovations can be expensive, clinics that follow the rules set down by HM Revenue and Customs can make large savings on their expenditure, says Adam Bernstein

The Influence of Game Theory in HM Revenue and Customs’ Choice of Civil or Criminal Enforcement

This article outlines the method by which self-employed individuals assess and fulfil their income tax obligations. The civil and criminal investigative powers available to Her Majesty’s Revenue and Customs (HMRC) are analysed, adopting a comparative approach, following which we present an application of game theory in determining the strategy for the most advantageous options available to both the taxpayer and HMRC for payment and recovery, respectively. Game theory provides an explanation for the conscious and purposeful decision-making of competing parties, based often on incomplete information and/or the intentions of the parties. This is particularly apt given the nature of the self-assessment tax regime in England and Wales with the choice of the taxpayer to fairly and honestly disclose their income and the tax to be paid, and equally HMRC with its choice to accept or challenge the details in the taxpayer’s return. As such, we use game theory as a means for determining optimal behaviours in difficult circumstances. Criminal and civil enforcement, Fraud, Game theory, HMRC, Tax returns.

The evolving nature of labour inspection, enforcement of employment rights and the regulatory reach of the state in Britain

The role of the state in directly regulating employment through enforcement mechanisms is increasingly significant and politically contentious in a context of weakened unions and the increasingly fragmented and precarious nature of the labour market. This article focuses on qualitative research on labour market regulatory actors in Britain, including the Health and Safety Executive, the Gangmasters and Labour Abuse Authority, as well as referencing relevant changes in HM Revenue and Customs, trade unions, legal and advice services and other state agencies. The article argues that a curious dynamic is emerging in labour market regulation involving simultaneous processes of deregulation, greater levels of direct intervention in some areas alongside marketisation, and innovative forms of collaboration between relevant state agencies. Much of this is, however, driven by constraints imposed through economic austerity and neoliberal policies with an increasing focus on immigration and policing concerns, creating notable sets of organisational tensions within and between the agencies and the work of their relevant inspectors.

Tax investigations: why HM Revenue and Customs might investigate a business

Adam Bernstein delves into the world of tax investigations, explaining the reasons behind HM Revenue and Customs deciding to investigate a business and what business owners can do to minimise the chances of this

EU national challenges the Common Reporting Standard1

This is the fourth of a series of articles written by the author for Trusts & Trustees in connection with the Common Reporting Standard (CRS) and the Beneficial Ownership Registers (BO Registers). With titles such as ‘A Call to Action’ and ‘A New Battle Front’, the previous articles set out the concerns surrounding the new rules. After more than three years of campaigning, an active challenge pertaining to these issues has been brought against HM Revenue and Customs on behalf of a client.

Eyes on the Commercial Ball

When enfant terrible Damian Hirst, reputedly Britain's highest earning artist, recently said in relation to the UK and its tax system that 'I like living here. If you live somewhere nice you've got to pay the taxes, haven't you?' every tax commissioner was smiling, along with the HM Revenue and Customs department. We probably even decided at that moment that 'we got' his work depicting an Australian 14-foot tiger shark embalmed in a formaldehyde tank! Mr Hirst did add, 'Unfortunately' to his comment about paying tax. But that is the catch is it not? And Damian Hirst gets it. Taxes are the price we pay as part of enjoying a certain lifestyle and the services that go with it.

Paid in Full: A Critical Look at the Law and Economics of the Football Creditors Rule

The Football League has recently modified its Football Creditors Rule. Once the sport’s financial regulatory bête noire, the changes met with little fanfare. However, these amendments do not fundamentally change the essential structure of a regime that has seen criticism from the media, the judiciary, academics, and indeed has been subject to litigation by the British tax authorities. This paper examines the law and economics of insolvency in English football, framing the case of HM Revenue and Customs v. The Football League Limited & The Football Association Premier League Limited in its prevailing economic context and considering the particular legal challenge brought by HM Revenue and Customs, which was ultimately unsuccessful. Moving beyond the decision in the above cited case, a critique of the underlying cogency and validity of the Football Creditors Rule is provided, which is centred on the views espoused by Michael J. Sandel in What Money Can’t Buy: The Moral Limit of Markets. Particularly, it is posited that the nature of the rule has served to debase the norms that should govern football clubs’ financial management and has instead abetted a climate of free spending by systemically diminishing the downside risk of insolvency between football clubs.

O.R. In HM Revenue & Customs

O.R. In HM Revenue & Customs

The trials and tribulations of accessing data from routine sources

There are a number of administrative datasets that routinely record information on individuals in the UK. Such routine or ‘Big Data’ sources record specified data variables that are largely limited to those that enable the intended objectives of the data holder. Routine sources include clinical datasets such as Hospital Episode Statistics (HES) and the Clinical Practice Research Datalink (CPRD). In addition, non-health data is recorded by the Department of Work and Pensions (DWP), HM Revenue and Customs (HMRC) and The Driving and Vehicle Licensing Authority (DVLA) in order to meet the specified objectives of each authority. Routine data applied to clinical research is potentially cost and resource-use effective. Clinical sources of data such as HES and CPRD are commonly accessed to provide data for retrospective observational and record-linkage studies and there are many published examples. However, there is limited evidence on the use of routine data in prospective studies, particularly randomised controlled trials (RCTs). This on-going project aims to assess the feasibility, accuracy, reliability and additional benefits of using data from routine sources for patients participating in the Standard and New Antiepileptic Drugs II RCT. Clinical and health economic outcomes will be examined from sources including HES, CPRD, DWP, HMRC and DVLA and assessed in comparison to data obtained from traditional RCT methods. This presentation will narratively summarise the methods of access, application procedures and limitations encountered thus far with accessing individual-level, linked data from the listed routine data sources.

Recent Trends in the Size and the Distribution of Inherited Wealth in the UK

AbstractIn this paper, we use HM Revenue and Customs (HMRC) estate statistics and micro data from four UK household surveys to examine changes in the size, the composition and the distribution of inherited wealth in the UK over the period 1985−2010. Our findings indicate that the period under examination is characterised by a substantial increase in the flow of inheritance. This increase, which was particularly marked in the early 2000s, was mainly driven by an increase in housing inheritance, which in turn reflected the rise in house prices and, to a lesser extent, the increase in the proportion of inheritances that included housing assets. The distribution of inheritance amongst recipients became more unequal over this period. However, the inequality‐increasing effect from the greater dispersion in the distribution of inheritance was counterbalanced by the increase in the percentage of the population who received an inheritance, resulting in a small decrease in the inequality of inheritance for the population overall. Analysis of the distribution of inheritance by socio‐economic status suggests a positive association between inheritance and socio‐economic status, with some evidence suggesting that this association might have strengthened over time. Overall, however, the value of inheritance for most people is rather small and the differences across groups rather moderate.

Exmoor Coast Boat Cruises Ltd v HM Revenue and Customs Commissioners

Exmoor Coast Boat Cruises Ltd v HM Revenue and Customs Commissioners

Teamworking under Lean in UK public services: lean teams and team targets in Her Majesty's Revenue & Customs (HMRC)

The authors of The Machine that Changed the World were in no doubt about the importance of teamworking in lean production: ‘in the end’, they say [Womack, J., Jones, D, & Roos, D. (1990). The machine that changed the world. New York: Rawson Associates, p. 99], ‘it is the dynamic work team that emerges as the heart of the lean factory’. It is with this bold statement in mind that we seek to explore and develop our conceptual and practical understanding of how teamworking operates under Lean. We examine these issues in the context of a high-profile case of Lean implementation in the UK public sector, the Pacesetter programme of the UK's tax assessment and collection service, Her Majesty's Revenue & Customs (HMRC). We find that although the teams themselves were ostensibly set up on a lean basis, they were largely unable to operate as such as a result of the pressures they faced to meet their work targets. The operation of the teams thus retained, and was shaped by, characteristics of the pre-existing ‘target-based’ mode of teamworking. This, in turn, suggests particular ways in which we might better understand how Lean interacts with the context or environment into which it is introduced. These findings also to some degree run counter to the overwhelmingly negative account of Lean put forward in other recent studies of HMRC [e.g. Carter, B., Danford, A., Howcroft, D., Richardson, H., Smith, A., & Taylor, P. (2013a). Taxing times: Lean working and the creation of (in)efficiencies in HM Revenue and Customs. Public Administration, 91, 83–97].

‘They can’t be the buffer any longer’: Front-line managers and class relations under white-collar lean production

This article reasserts the value of the examination of class relations. It does so via a case study of tax-processing sites within HM Revenue and Customs, focusing on the changes wrought by the alterations to labour and supervisory processes implemented under the banner of ‘lean production’. It concentrates on the transformation of front-line managers, as their tasks moved from those that required tax knowledge and team support to those that narrowed their work towards output monitoring and employee supervision. Following Carchedi, these changes are conceptualised as strengthening the function of capital performed by managers, and weakening their role within the labour process.

Blackburn and others v HM Revenue and Customs Commissioners: [2013] UKFTT 525 (TC): First-Tier Tribunal Tax Chamber: Her Honour Judge Barbara Mosedale: 2 October 2013

Blackburn and others v HM Revenue and Customs Commissioners: [2013] UKFTT 525 (TC): First-Tier Tribunal Tax Chamber: Her Honour Judge Barbara Mosedale: 2 October 2013

Cutting a good deal – UK Uncut, Goldman Sachs and the challenge to administrative discretion

Purpose – The purpose of this paper is to assess the issues raised by and the possible long-term significance of the judicial review obtained by the pressure group UK Uncut into HM Revenue and Customs’ decision to forgive £10 m of interest payable by the investment bank, Goldman Sachs. Design/methodology/approach – Using Lukes’ (2005) three dimensions of power as a conceptual framework, the paper compares this case with a similar case from the 1980s in order to discuss the importance of democratic oversight of the way in which public bodies discharge their duties, the extent to which this should override the principle of taxpayer confidentiality and the extent to which legal rules and procedures permit such oversight. Findings – The comparison shows that, by permitting the review to proceed, greater weight was given to the importance of democratic oversight in the UK Uncut's case, but the rejection of both cases demonstrates that the tax authority is permitted very wide administrative discretion. However,...

EU Tax Issues Arising from Croatia’s Accession to the EU: Dividend Taxation

The following document will examine the position of Croatian tax system in relation to the EU tax system. The issues that the document will concentrate on are dividend taxation issues. First, the gradual development of the European Union landmark judgments will be examined, from the first, Verkooijen case, to the current situation in the The Test Claimants in the FII Group Litigation v. The Commissioners for HM Revenue and Customs (FII GLO) case. Second, dividend taxation in other Member States in Croatia's region (Eastern Europe) will be looked at together to see what hurdles they had to overcome when entering the EU while examining how comparable Croatia is to them. Third, the text will assume a critical approach of the new system of dividend taxation adopted in Croatia in March 2012 and its subsequent implementation. At the end of the paper, it will be discussed whether the changes made by Croatia are sufficient to make it compliant with EU law on dividend taxation.