Introduction
Over the past three years the tax practice group at Berwin Leighton Paisner has grown considerably and now deals with a wide variety of types of tax law. This has led to an increasing demand for tax materials and a sharp rise in the number of research requests from this team. The following remarks are based on the author's experience of establishing a departmental library and being the first point of contact for tax library enquiries.
General characteristics of tax legal practice
There are three major features of tax legal practice which have a major impact on providing a library service.
Firstly, much tax law work is concerned with the minutiae of statute wording and case law interpretation. This might sound like a truism for legal practice generally, but it is especially true for tax, where the precise meaning of a statutory provision will determine whether a client is faced with a tax liability or can take advantage of a tax exemption. The financial consequences of this are often considerable.
The second characteristic of tax law is the speed with which it changes. Taxation is not only a highly politicised issue, but frequently illustrates the law of unintended consequences. The practical effects of a legislative provision can differ markedly from the original intention, so government is endlessly fine-tuning existing legislation to maximise revenues and to close loopholes.
Finally, tax is an essential element in many areas of work for the corporate law firm including corporate transactions, business restructuring, finance, employment, pensions and real estate work. This leads to lawyers specialising in particular areas of tax law and has also resulted in a vast array of specialist literature.
These three factors mean that a tax department needs a great many resources both printed and online. This is not just to match a wide range of questions to specialist literature, but also to ensure lawyers can keep up-to-date with changes and have the resources to deal with historical enquiries, when they need to check the law in force at a specific date.
Key sources
Whatever a lawyer's specialism, he is unlikely to want to be far away from a number of key sources providing access to primary legislation and commentary. These tend to be divided into main categories, direct and indirect taxation.
Direct taxation is comprised of taxes such as income tax, corporation tax and inheritance tax. The basic idea is that “a direct tax is borne by the taxpayer and is not passed on to any other person, whereas an indirect tax is passed on by the payer so that the burden of the tax is ultimately borne by another, e.g. VAT, which although paid by the business, is passed on to the customer”.Footnote 1
Key sources for direct taxation include Simon's Taxes, a ten volume encyclopaedia from LexisNexis which includes legislation, official guidance and UK tax treaties. An equivalent service is published by CCH, their British Tax Library. Equally essential are the multi-volume legislation handbooks. LexisNexis publish Tolley's Yellow Tax Handbooks and CCH publish their multi-volume Red Book. These publications are mirrored in the field of indirect taxation with De Voil's Indirect Tax Service – a six volume looseleaf, the CCH British VAT Library, Tolley's Orange Tax Handbook and the CCH Green Book.
1) Textbooks
There is an enormous range of textbooks and encyclopaedias published for different types of tax. Many of these are reissued on an annual basis. LexisNexis, CCH, Sweet & Maxwell and Bloomsbury Professional all publish extensively in this area. Key publications include handbooks on the main types of taxation: income tax, corporation tax, capital gains tax, stamp taxes, etc. produced by both LexisNexis Tolley and CCH. Other key specialist texts include Gammie and de Souza, The Law of Land Taxation, Monroe and Nock on the Law of Stamp Duties, Bramwell, Taxation of Companies and Company Reconstructions, Whiteman and Sherry on Income Tax, Whiteman and Sherry on Capital Gains Tax and Ghosh, Johnson and Miller on the Taxation of Corporate Debt and Derivatives.
2) Official publications and legislation
There is at least one Finance Act every year and many provisions come into force very swiftly after Royal Assent. Some provisions take retrospective effect. The same is true of secondary tax legislation. This means that proposed legislation is carefully scrutinised to gauge the effect on clients' businesses. Lawyers cannot wait for these changes to be incorporated in new editions, but need to check Finance Bills and Hansard debate on these as soon as they are published. Other official publications such as guidance from HM Revenue and Customs (HMRC or ‘the Revenue’), ministerial statements, the Budget and Pre-Budget Report and tax treaties with other countries also need to be checked as soon as they are available. The tax library will therefore often have much greater holdings of official publications than other departments. The websites of Parliament, HM Treasury and HMRC, and email alerting services are crucial in communicating these changes as quickly as possible.
3) Case law
Not surprisingly, for an area of law which relies so heavily on questions of interpretation, case law is frequently referred to. Many tax cases appear in more general series of law reports and on online databases such as Westlaw, CCH and LexisNexis Butterworths. There are a number of specialist series such as the Tax Cases, published by the Stationery Office and two highly regarded sets of reports from Lexis – Simon's Tax Cases and Simon's First Tier Tax Decisions. The former deal with Court cases, the latter with tribunal decisions. This series was known as Simon's Special Commissioners Decisions until earlier this year when the tribunal system was restructured. CCH also produce a number of reports such as the British Tax Cases and British VAT Cases. Again, as it is essential for lawyers to understand the implications of case law as soon as possible, new cases are often read and circulated as transcripts, rather than waiting for the reports.
Themes in tax research
As there are tax aspects to so many areas of work, there is a great variety of research enquiries. Nonetheless a number of themes emerge.
1) Guidance on wordings
Tax lawyers frequently have to find background commentary and guidance on statutory wording. For definitions of words or phrases, there are a couple of tax-specific sources in addition to Stroud's Judicial Dictionary and Words and Phrases Judicially Defined. These are the table of judicial definitions in the index to Simon's Tax Cases and, for older cases, Harrison's Index to Tax Cases – now no longer in print, but shortly to appear online via CCH.
There are also sources of guidance on specific pieces of legislation. Much of this is published on the HMRC website. This guidance does only represent HMRC's view of an issue. It does not, of course, have the force of legislation and so will not necessarily be followed.
As HMRC was only established in 2005, many of the publications of its two predecessor bodies, the Inland Revenue and HM Customs and Excise, are not on the website. Fortunately much of this archive is available via LexisNexis Butterworths and CCH. Simon's Weekly Tax Intelligence and De Voil's Indirect Tax Intelligence both reproduce most relevant guidance as it is published and this can be searched on the online version. Other material is included in the Specialist Tax Regulatory Materials file – an often overlooked, but invaluable resource on LNB.
An alternative way of finding older Revenue publications is to check the archive of the Westlaw current awareness service, which includes bibliographic records for many official publications and the URLs of the original documents. Having this URL, you can often still access the document even if it is no longer on the current website, by searching the Internet Wayback machineFootnote 2.
2) Parliamentary materials and Pepper v Hart research
The search for guidance on the wording of a statute will often involve looking at the background materials produced. Tax lawyers make a good deal of use of the explanatory notes accompanying Bills and Acts, and also any consultation papers predating these. In my experience, they are also more likely to request Pepper v Hart research, looking at Parliamentary discussion of Bills, than other departments. Recent guidance on when Parliamentary debates can be consulted to elucidate a statute was given in an article in Taxation.Footnote 3
Finding Parliamentary discussion on a section of an Act is usually a time-consuming task and fraught with the fear that one might have overlooked something relevant amongst the huge amount of materials. For recent Finance Acts, however, there is a very efficient labour-saving device. Since 1998, Taxation magazine has published a table for each Finance Act which provides all the citations needed to track down any discussion on an individual sectionFootnote 4. The section is matched up with the original clause number and the dates and Hansard column numbers for any discussion. This includes references to the Standing Committee scrutiny of the Bill, which is often a good source of relevant commentary. It is much quicker to find these on the Parliament website with an accurate citation than trusting to the vagaries of its search engine.
3) Second guessing the Revenue
There are, of course, occasions when exhaustive research into legislation and case law will still leave issues unresolved. At this point a lawyer will want to establish what view the Revenue is likely to take, should they decide to investigate the matter on which he is advising.
In addition to the guidance and technical briefings which the Revenue publishes, there are a number of other sources which can shed light on how it views an issue. For many years now, most of the guidance manuals which HMRC draws up for its own staff have been published on its website, in line with the Code of Practice on Access to Government InformationFootnote 5. Again, this is guidance and does not have the force of law and may not be correct. For researchers who despair of the search capabilities of the HMRC website, these manuals are also published on LNB. HMRC advise that this guidance is not comprehensive and occasionally material is withheld under the Freedom of Information Act exemptions. The manuals are, nonetheless, remarkably extensive.
For lawyers wanting to check historical guidance, LexisNexis produce historical versions of the manuals on CD-ROM covering 1995–2004. CCH have an online version of the manuals archive from 1997 to date.
4) Double tax treaties and the OECD Model Convention
There are many circumstances in which cross-border issues arise in tax. One of the commonest is double taxation, where a taxpayer faces paying taxes levied by more than one state on the same income for the same period. This can arise for instance where two countries both consider a taxpayer to be resident in their country for income tax purposes. To limit the injustice which this can cause and the consequent negative effects it would have on the flow of international trade and investment, countries reach agreements between themselves regarding how to define when an individual is resident or when a company is established in a country. These bilateral arrangements are called double tax treaties and are regularly consulted. Many are published on the HMRC websiteFootnote 6 which maintains a list of all the treaties currently in force between the UK and other countries. There are over one hundred of these. All the double tax treaties are published as statutory instruments once they are ratified, and thus can be accessed via online collections such as Westlaw, LNB and the Office for Public Sector Information website. The UK double tax treaties are also reproduced in Volume 10 of Simon's Taxes and as a CCH online service.
There are more than two and a half thousand double tax treaties worldwide and those conventions to which the UK is not a party can be accessed via subscription databases published by Tax Analysts, CCH and the International Bureau of Fiscal Documentation (IBFD).
A further source which is often consulted in the context of double tax treaty questions is the OECD Model Tax Convention. This seeks to provide a standard model for double tax treaties for OECD member states to use and “a means of settling on a uniform basis the most common problems that arise in the field of international juridical double taxationFootnote 7.” The OECD publishes printed and online versions of the Model Tax Convention.Footnote 8 It is also available in Volume 10 of Simon's Taxes and via the Tax Analysts and the IBFD online services. Sweet & Maxwell publish a highly regarded looseleaf commentary on the Model Convention by Philip Baker.
5) Tax in other jurisdictions
While most English lawyers would not generally advise in detail on the tax law of other jurisdictions, they often need to obtain an overview of a tax regime abroad. This might be to confirm whether a type of tax is levied in that country and, if so, what rates are applied. A number of useful sources provide just such an overview. The IBFD publishes annual handbooks, on a global and a regional basis. The online version of this publication has the advantage of being more regularly updated.
A search on Westlaw's Legal Journals Index will often provide references to commentary on aspects of taxation in other countries. One of the journals indexed here is the International Tax Review, which provides substantial articles on topical tax issues across the world. The online version of the journal has additional monthly updates for twenty jurisdictions and the European Union. BNA International also publishes a range of titles dealing with aspects of international tax law such as transfer pricing.
6) Accounting standards
Accounting standards might more obviously be considered the province of accountants, but they are frequently consulted by lawyers as well, since advice on a company's tax affairs will have to work from an accounting point of view, as well as complying with legislation. Generally accepted accounting practice has no UK legal definitionFootnote 9 and is comprised of the Financial Reporting Standards (FRSs) and additional statements issued by the Accounting Standards Board. These can take many forms - Statements of Standard Accounting Practice (SSAPs), Urgent Issue Task Force (UITF) abstracts, Statements of Recommended Practice (SORPs) and Financial Reporting Exposure Drafts (FREDs). They are gathered together and published annually by PriceWaterhouse Coopers and CCH as the Manual of Accounting - UK GAAP. As accounting standards are continually being revised, lawyers will often need to check the latest documents. These are available for free on the Accounting Standards Board website.Footnote 10
To complicate matters further, some companies have to prepare their accounts to comply with the International Financial Reporting Standards (IFRSs). These are published by the International Accounting Standards Board and most of them can be downloaded free from the IASB websiteFootnote 11 Consolidated versions of the IFRSs are also published as an annual volumeFootnote 12. Guidance on using these standards is provided in International GAAP, produced by Ernst & Young and published by John Wiley & SonsFootnote 13.
Conclusion
The remarks above should have demonstrated the range of topics on which tax lawyers may be called upon to advise. They also explain why tax lawyers require considerable collections of resources to be able to help their clients.
The advent of databases has increased the amount of material available and has been particularly valuable in providing widespread access to sources such as the Revenue manuals. As with so many areas of practice, the key challenge for information professionals is to assist lawyers in finding their way through the vast maze of this information.
