Iain’s practice focuses on tax disputes. He has litigated several of the leading cases on HMRC’s investigative powers, tax avoidance, abuse of rights, and tax fraud and evasion. He continues to have a market-leading presence in these areas and is ranked as a ‘leading partner’ for tax disputes in the Legal 500 and in Chambers and Partners. He is often sought out by other professional advisors for a second opinion and to help unlock long-running or complex problems.
Iain acts for an international client base, ranging from MNEs and PLCs to UHNWIs, trusts and funds. His practice spans controversies in all of the major taxes, with a particular focus on VAT disputes, corporation tax disputes, international tax disputes, transfer pricing disputes, diverted profits tax disputes, and employment tax disputes.
Much of Iain's work involves fact-heavy, high-stakes, strategically significant disputes that are likely to be resolved through litigation or the credible prospect of litigation. He is experienced in managing complex, often fast-moving, multi-disciplinary cases, which frequently involve overlapping regulatory and commercial issues and the input of expert witnesses. Iain has litigated cases that have created authority in the Tax Tribunal on issues such as disclosure, sampling, and pleading.
Before pupillage, Iain worked for HMRC Solicitor’s Office. He has acted as counsel both for and against HMRC in a variety of disputes in the Tax Tribunal, Upper Tax Tribunal, High Court (Admin, ChD and Comm), Court of Appeal (Civil), and UK Supreme Court. Before that, he was a tenant at a leading set of barristers’ Chambers and a Dispute Resolution Partner at a City law firm.
Called to the Bar of England & Wales, March 2006.
Iain is ranked as a ‘leading partner’ for tax disputes in the Legal 500 and in Chambers and Partners. He has also been listed in Investment Financier’s ‘Tax Disputes Power Players’.
"Iain MacWhannell is excellent. He is commercial and astute, but also personable. He is the go-to lawyer for major VAT cases.” (Legal 500)
“Iain MacWhannell is a star individual. His attention to detail is remarkable, and he has a real feel for litigation tactics (and an uncanny ability to predict what HMRC’s next move will be).” (Legal 500)
“Iain MacWhannell – charming and forensically bright. He has fantastic judgment and instinctively knows the right decisions to make in complex, high value commercial litigation. As a former barrister, Iain’s tactics are at the heart of what he does and why he is so very much in demand. Revered for his knowledge and experience of FS, tax, civil fraud and injunctions work, he has a proven track record in heavy weight litigation.” (Legal 500)
“Iain MacWhannell is excellent. He has a keen eye for detail and is an excellent negotiator and litigator. Clients are in the safest of hands with Iain.” (Legal 500)
"He is organised, engaged and gives clients a level of care and attention that you just don’t get elsewhere." (Chambers and Partners)
"Iain has been extremely professional and attentive throughout. The level of knowledge he demonstrates provides a sense of calm in a very difficult situation." (Chambers & Partners)
• Acted for a high profile umbrella company in relation to assessments to NICs valued at over £170M based on the 'fraudulent documents' exception.
• Represented seventeen MNEs in their challenge to the UK's dividend taxation scheme in respect of profits sourced abroad. The UKSC described the case as involving “issues of unparalleled complexity, difficulty and novelty, as well as huge sums of money.”
• Represented over 24,000 businesses in appeals against VAT de-registration and assessments to VAT and NICs in the largest group litigation conducted in the Tax Tribunal. Evidence was collected in the UK, the Middle East, and Asia.
• Advising a multi-national financial services business in relation to a Diverted Profits Tax Notice and connected Transfer Pricing issues.
• Acting for various companies in appeals to the Tax Tribunal and the appellate courts in relation to Kittel decisions (the “knew or should have known” test) and corresponding sections 69C and 69D Penalties.
• Advising a UK business in relation to Schedule 36 Information Notices and corresponding tax tribunal proceedings.
• Represented a European business in concurrent tax investigations and tax proceedings across multiple European jurisdictions, including in an application for Judicial Review.
• Advising an Indian business in respect of exchange of information powers between different national tax authorities.
• Advising a UHNWI in relation to a Judicial Review of the extent of HMRC’s investigative powers and HMRC’s ability to carry out ‘informal investigations’ without statutory control.
• Advising a Caribbean-based hedge fund in relation to the Banking Surcharge.
• Acting for a Middle Eastern royal family in relation to an Annual Tax on Enveloped Dwellings (“ATED”) dispute in respect of multiple trophy assets in London.
HMRC has published a policy paper and draft legislation that proposes a statutory obligation on taxpayers to correct errors in past tax returns. It is proposed that this new legislation should feature in Finance Bill 2026/27 and would come into effect on a day to be appointed. The draft legislation is presently out for consultation until September and so may change.
The same draft legislation also covers a proposed power for HMRC to issue correction notices where it has reason to suspect an error in a document that can be corrected. This note concentrates on the proposed obligation to self-correct.
The genesis of this proposal is the HMRC Tax Administration Framework Review in 2024/25. Responses to that review were published in April 2025 and one of the proposals that the Government said it would take forward was approaches to taxpayer self-correction. This current proposal is presented as part of an approach to modernise and simplify tax administration.
To date the precise legal (as opposed to professional or ethical) obligation to correct the position when a taxpayer discovers a mistake in a tax return already submitted to HMRC may have been unclear. This proposal intends to address that situation.
Under the new proposal, when a person “becomes aware” of an inaccuracy in a return that has led to an underpayment of tax and, at that time, the inaccuracy may be corrected either by the taxpayer themself or HMRC in some way, the taxpayer must either correct the inaccuracy themselves if they are able to do so or inform HMRC of the inaccuracy. Section 118(6) TMA 1970 is amended so that failure to comply with the obligation to correct will lead to the inaccuracy being treated as deliberate on the taxpayer’s part. Such treatment would impact upon HMRC’s assessing powers, the quantum of any penalty for non-compliance and open the possibility of ‘naming and shaming’ in connection with what may previously have been an innocent error.
It should be noted that the draft legislation is not restricted to a particular type of inaccuracy or error. The governing concept is an “inaccuracy in relation to which Condition 1(2) of [Schedule 24 FA 2007] is satisfied”. So, the test proposed is: does the inaccuracy “amount to or lead to (i) an understatement of a liability to tax, (ii) a false or inflated statement of loss or (iii) a false or inflated claim to repayment of tax.” Consequently, a wholly innocent mistake is within scope.
The trigger for the obligation to self-correct is that the taxpayer becomes “aware” of the inaccuracy. The concept of ‘becoming aware’ is not unknown in tax legislation but is a term that has an inherent vagueness of meaning. Actual knowledge is clearly within scope but what about the jurisprudence on ‘blind eye knowledge’? Is a decision not to look at what the taxpayer suspects might be a problem within scope?
There are a number of questions and concerns with this proposed legislation. For example;
• How does this proposal interact with the declaratory nature of judicial decisions? Does a return that was submitted based upon a particular view of the law become inaccurate and liable to correction when a subsequent judicial decision overturns that view of the law? How does the taxpayer deal with conflicting decisions as a case proceeds on appeal? Suppose the initial view of the law was arguably “in accordance with the practice generally prevailing at the time when it was made”?
• Precisely when does the taxpayer “become aware” of the inaccuracy so as to become subject to the obligation to correct? Suppose that the taxpayer is not an individual?
Hopefully these and other questions will be answered by the current consultation on the draft clauses. However, it does seem likely that some provision relating to an obligation to self-correct will appear in next year’s Finance Bill. Taxpayers should be aware of this upcoming new obligation.
Should you wish to discuss this Insight, please contact:
Iain MacWhannell, Partner in our Tax Disputes Team:
imw@jha.com
+44 (0)20 7851 8888
Steve Bousher
*The class of documents potentially within the new obligation is wider than simply tax returns. The class includes all documents of types that fall within paragraph 1(4) of schedule 24 Finance Act 2007. This note refers simply to ‘returns’ as a convenient shorthand.
Shortly before a 4-week trial was due to commence, HMRC conceded that the appeal of Ducas Ltd (part of the Maxipay group) should be allowed in full and the associated Freezing Orders discharged. HMRC are also to pay Ducas’ costs on the indemnity basis. There will also be an enquiry as to damages caused by the Freezing Orders.
The background to the appeal was that, in November 2024, HMRC issued Ducas with a £171m assessment under the agency legislation - the NICs equivalent of s. 44 ITEPA 2003. HMRC also obtained Freezing Orders against Ducas and other Maxipay companies on an ex parte (without notice) basis. HMRC also later brought proceedings against the Maxipay UBO and secured a Freezing Order on an ex parte basis - that claim has also been discontinued and the Freezing Order discharged.
Since November 2024, there have been numerous hearings in the High Court and the FTT in which we secured:
- the listing of a speedy trial;
- the continuation of a cross undertaking in damages on the Freezing Orders (which will now form the basis of the enquiry as to damages);
- a very favourable High Court costs decision after various interlocutory hearings in which the Judge praised the companies’ ‘mature’ and ‘sensible’ approach to the Freezing Orders (HMRC v Ducas Ltd and Others [2025] EWHC 226 (Ch) [2025] Costs L.R. 1095); and
- heightened disclosure from HMRC.
The team also successfully resisted an appeal by HMRC to the Upper Tribunal in relation to disclosure which resulted in HMRC being ordered to pay Ducas’ costs of that appeal (HMRC v Ducas Ltd [2025] UKUT 362 (TCC) [2025] S.T.C. 1843): https://assets.publishing.service.gov.uk/media/6903308692779f89baa51fc2/HMRC_v_Ducas_Ltd_-_Final_Decision_.pdf
Iain MacWhannell instructed David Bedenham KC and Chris Stone KC of Devereux Chambers.
Iain, David, and Chris were greatly assisted by the wider JHAB team which included Thomas Hemming, Julia Glukhikh, Jono Gould, Tessa Hocking, John Hayton, Charlotte Agnew-Harington and Seth Cumming.
Case Note: ‘The approach of the Tax Tribunal to evidential sampling in Kittel cases’
The First-tier Tribunal (Tax Chamber) has recently published a decision of Judge Dean on a sampling application by HMRC in the case of Ezy Solutions Ltd (in liquidation) and Milo Corporation Ltd (in liquidation) v HMRC [2024] UKFTT 00209 (TC). The Decision was released on 9 March 2023 but had not been published until recently.
HMRC applied for a Direction that the parties agree a sample of 50 Mini Umbrella Companies upon which the appeal would be determined. HMRC contended that the sample would limit the scope of the parties’ evidence in the appeal. HMRC argued that it would be disproportionate and “take [HMRC] an inordinate amount of time” serve the evidence in relation to all of the MUCs that had actually supplied the Appellant.
The Appellants argued that a representative sample could not be agreed until all of the evidence in relation to the MUCs had been served and that in a Kittel case HMRC are required to prove all of the fraud, tax losses, and connections upon which they relied.
Judge Dean refused HMRC’s application and stated at [38]:
“It is a fundamental principle of natural justice that a party must know the case against it. I cannot see how in circumstances where HMRC propose not to serve the evidence which formed the basis of its decisions, the Appellants could form a view as to whether any sample is representative or whether there is commonality.”
Judge Dean also stated at [41] that she considered HMRC’s argument that serving their evidence would take “an inordinate amount of time” to be insufficient to justify their application.
More recently, in a case management decision in Horizon Contracts Limited (in liquidation) & Others v HMRC (unreported), Judge Poole followed Judge Dean’s reasoning and stated that ‘sampling’ may be “an appropriate way to proceed for the purposes of the ultimate hearing” but found that this was a matter to be resolved at a later stage once “the full evidence upon which HMRC rely has been disclosed to the Appellants”.
Iain MacWhannell, instructing David Bedenham, successfully represented an employment intermediary in an appeal against a denial of input tax and £15 million VAT assessment.
The intermediary had purchased (and on-supplied) labour from thousands of mini-umbrella companies. HMRC subsequently denied the intermediary’s input tax on the Kittel and Fini basis.
The appeal was listed for a 10 day hearing before the Tax Tribunal.
On day 1, HMRC opened their case by setting out their detailed basis for applying the Kittel and Fini principles.
On day 2, David opened the Appellant’s case. This included drawing on the extensive evidence filed on behalf of the Appellant and raising numerous other challenges to highlight the flaws in HMRC’s case.
On day 3, HMRC applied for an adjournment. That application, which was opposed by the Appellant, was refused by the Tribunal.
HMRC then announced in open court that they were withdrawing their Kittel/Fini decision and VAT assessment in full. The Tribunal then ordered HMRC to pay the Appellant’s costs.
