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A high-profile legal battle between the taxman and a firm of accountants that specialises in the media industry is currently at a stand-off but could escalate into a skirmish following the latest announcements on the matter.
Christopher Lunn and Company (CLAC) has confirmed it is waiting for HMRC to decide whether or not to again withdraw the tax agent status the department was forced earlier this year to reinstate following a legal ruling in the High Court.
The East Sussex-based accountancy, the clients of which work mainly in the TV industry, was victorious in February when the outcome of a judicial review compelled the Revenue to overturn its decision to no longer recognise CLAC as an agent.
Mr Justice Kenneth Parker ruled that the HMRC commissioners should not have made their revocation without first giving the business the opportunity to make a representation.
The matter remitted to the commissioners for reconsideration; CLAC has now made a representation and is awaiting the taxman’s response – which could lead to further wrangling in court between the two parties.
The Revenue originally withdrew CLAC’s tax agent status in November, following a June raid of the firm’s premises as part of criminal investigation of alleged irregularities into the accounts and tax returns of clients.
As the investigation continues – no charges have yet been brought – the business and HMRC have reached an agreement in respect of a second judicial review, with the taxman agreeing to supply copies of the documents put before the courts to obtain search warrants last year. The Revenue has agreed to pay CLAC's legal fees in relation to the issue.
