Marks & Spencer v Halsey
Dorsey & Whitney’s historic win in the M&S case has proved
to be Her Majesty’s Revenue and Customs’ biggest headache
in 2005. ‘This was the case that was going to blow apart
every tax system in Europe,’ said Philip Gillett, chairman of
the CBI’s tax committee.
The Marks & Spencer v Halsey case has been the talk of the
tax profession in 2005 and the outcome at the European Court
of Justice has opened the floodgates for challenges to the UK’s
corporate tax system. The victory for M&S, worth around £50m
to the retail giant, could eventually cost the Revenue £20bn,
sources predict: 300 companies have issued similar claims.
Further, it has demonstrated to multinationals that challenging
the government through litigation can be an effective route to
policy change. But Dorsey hasn’t stopped there: Whitehead’s
team – albeit depleted by the defection of some members, who
weren’t on the M&S team, to DLA Piper last December – is
currently acting in five of the six group litigation actions
proceeding through the courts that challenge the legality of the
UK’s international obligations under the EC Treaty. And the
upcoming Cadbury Schweppes case could deem the UK’s
controlled foreign companies system illegal. Simply, Dorsey &
Whitney’s tax team is the biggest advantage UK corporates
currently have when disputing harmful tax legislation.
Simon Whitehead (centre) accept
s the award from George Bull of B
Linklaters has continued to shine in 2005, with
outstanding work by its tax-driven finance practice.
The demerger of Burberry by GUS was a unique
transaction, requiring clearance, allowing Burberry to
be demerged tax-free to GUS shareholders. The team
has been increasing its litigation capabilities, notably
with the £2.7bn 3G VAT claim at the ECJ from four
leading mobile telecommunications companies that
challenge the nature of the relationship between
domestic and European tax law, and the relevance of
the European VAT directive.