Advocacy for the tax adviser

Appearing as an advocate for your client before the Commissioners or the VAT and Duties Tribunal is a challenging responsibility for a Chartered Tax Adviser. You should not accept such instructions lightly and it will be appropriate in many situations to engage the support of legal counsel to serve the best interests of your client.

From time to time a member of the Institute may represent a client in a tax appeal heard by the General or Special Commissioners or the VAT and Duties Tribunal (see footnote). Our Professional Rules and Practice Guidelines (appendices 6 and 7) include guidance on representation before these bodies including some of the important ethical principles.

Appearing as an advocate for your client before the Commissioners or the VAT and Duties Tribunal is a challenging responsibility for a Chartered Tax Adviser. You should not accept such instructions lightly and it will be appropriate in many situations to engage the support of legal counsel to serve the best interests of your client. For those who have the confidence to represent their clients in this capacity, I commend the following article by Penny Harper, Director of Professional Development Programmes for Clients, Inns of Court School of Law. It outlines the key factors to be taken into account in preparing your client’s case.

In recent meetings of the Institute’s Standards Committee, we have concluded that it is essential that those of our members who may represent their clients before the commissioners or VAT and Duties and Tribunal should be aware of relevant training. The Inns of Court School of Law runs programmes including advocacy, evidence, procedure, drafting witness statements, expert report writing and giving evidence in court. Please make sure that you are competent to represent your client’s best interests when you next appear at a hearing.

The number of contested hearings before VAT and duties tribunals, Special and General Commissioners is increasing. Tax advisers are increasingly called upon to represent their clients at these hearings. Here are some tips on developing the skills of an advocate and successfully presenting your client’s case.

Key Points:

• Prepare by identifying relevant law, issues, fact, and evidence.
  
• Make effective use of documentary and oral evidence.
  
• Make use of statements of agreed fact.
  
• Do not forget your overriding duty is to the tribunal.
  
• Speak slowly and clearly and make eye contact with the decision maker.
  
• Use questions to control your own and the other side’s witness/es.
  
• Be persuasive, clear and memorable.

Preparation

The golden rule is preparation, preparation, preparation. Effective advocacy is underpinned by careful case analysis. This includes:

• Identifying the issues in the case e.g. have the Revenue quantified the taxpayer’s liability correctly

• Identifying, analysing and evaluating the facts. Obtain all of the facts and review them critically. If new facts emerge at the hearing, perhaps from the other side, the whole basis of the client’s case may be undermined. The facts that support your client’s case (strengths) and the facts that undermine your client’s case (weaknesses) should be identified. The facts should be evaluated to reveal gaps or inconsistencies in your own case and the other side’s case. This is useful for cross-examination. It would be tempting, but wholly wrong, to attempt to devise facts to assist the client’s case. The tax adviser advocate has a primary duty, which overrides any duty he owes to his client, not to deceive or knowingly or recklessly mislead the tribunal: para. 2 of Appendix 7 to The Professional Rules and Practice Guidelines for the Chartered Institute of Taxation [‘PR&PG’]

• Identifying the best sources of evidence to prove the facts relied upon. This may be documentary (e.g. invoices or accounts) or oral witness evidence

• Identifying relevant law (e.g. statutes or decided cases)

• Identifying a case theory on which your client’s case will hang. For instance, this can be used to persuade a tribunal why an assessment is excessive and

• Checking to see that there are no conflicts of interest.

Knowledge of procedure, evidence and best practice

You must be familiar with procedure, evidence and the use of statements of fact: Appendix 6 PR&PG.

Use of documentary evidence

A party cannot simply turn up at a hearing and expect to put in evidence (without notice) any document he cares to choose. A list of documentary evidence should be compiled, and sent to the other side so they can agree to admit it as authentic (though not necessarily agreeing that its contents are true). If they do not agree that the listed documents are authentic, a ‘notice to inspect and admit’ must be served. If the other side’s list contains a document that you doubt the authenticity of, or if they have an original document which you wish to inspect, you must serve a ‘notice to produce’.

An agreed indexed and paginated bundle of documents should be produced for the hearing.

Oral Evidence

There are two types of witnesses who give oral evidence, experts and witnesses of fact. Witnesses of fact give evidence of what they have seen or heard (not what other people have told them occurred, this is hearsay). They should avoid drawing inferences, giving opinions or forming conclusions. Expert witnesses give evidence of both fact and opinion.

You should draft witness statements for your witnesses of fact. They must be in the words of the witness and signed by the witness as being true, see PR & PG Appendix 7, paras 3.3.1 & 3.3.3. The commissioner/tribunals may allow a witness of fact to refer to his statement, or let it stand as the examination-in-chief, but generally the evidence must be given by the witness without looking at the statement prepared for the purpose of the hearing. The witness statement assists you to ask the witness questions at the hearing. All witnesses are entitled to refer to contemporaneous notes, that were made at, or near, the time the event took place. These can include notes of meetings, accounting records and so on. An expert witness will write his own report (complying with Part 35 of the Civil Procedure Rules 1998). Witness statements and expert reports should be exchanged well before the hearing. An expert witness can refer to his report while he is giving his evidence.

You should prepare (not coach) witnesses so they understand their role, familiarise themselves with the notes, statements and documents and understand their weaknesses and strengths for cross-examination; see PR & PG Appendix 7 para 3.3.3.

If you or your opponent (tax inspector) have a dual role as both expert witness and advocate, be sure to separate your role as an expert witness (giving factual evidence and opinion) from your role as an advocate, who advances arguments to persuade the tribunal: see PR & PG Appendix 7 para 6.3.