Michael Thomas KC

Corporate and business tax

“popular choice with clients, who describe him as ‘supreme in his analysis’ and ‘a lawyer who provides solutions in a simple manner.’ He is held in especially high regard for his work in property tax, but also has a strong corporate and business tax practice.” Chambers and Partners

Michael has for many years been regarded as “one of the leading barristers for real estate taxes.” “He gives strong commercial advice and is particularly strong on real estate-related matters.” Since 2012 he has chaired an annual conference on Real Estate Tax.

Including (but not only) because UK land and property is held through a wide variety of investment structures and by every kind of owner Michael has extensive experience across the full spectrum of corporate and business taxation. Michael is often instructed in matters which concern multiple taxes and involve the interaction of corporate, indirect and capital taxes. In recent years Michael has frequently been instructed on the application of statutory anti-avoidance rules. 

Michael sits on the Practical Law Company’s Tax Consultation Board.

Examples of recent and typical work:

Advice

Site acquisitions for national house builders, including major developments at 9 Elms, other prime London locations and large regional sites.

Ability to take advantage of double tax treaties, interest deductibility and general structuring advice (transactions in land rules, DPT etc) especially in relation to real estate development projects.

Deductibility of interest in fund structures which hold real estate investment assets.

Loan relationships unallowable purpose test (Section 441 CTA 2009).

Aspects of the Corporate Interest Restriction.

Application of the Transactions in Land rules.

Acquisition structure for private equity to acquire significant stake in UK professional services firm.

Acquisitions of interests in partnership vehicles and related issues (including by financiers and on the buying out of private equity).

Tax consequences of restructuring the debt and equity holdings in a significant private company.

Land pooling and other forms of collaboration agreement prior to the sale of land for development (Jenkins v Brown pooling, Cross Options etc.)

Sale and leaseback transactions.

Incorporation of property investment businesses.

Business Assets Disposal Relief (formerly Entrepreneurs’ Relief)

Advising on the tax consequences of transactions involving cryptocurrency, including staking.

Litigation

Acting for taxpayers in respect of investigations by what was formerly HMRC’s Offshore Property Developers Taskforce.

Christian Candy v Revenue & Customs Commissioners [2022] EWCA Civ 1447, [2022] STC 1225 Michael, leading Quinlan Windle of chambers, appeared in the Court of Appeal for Mr Candy in respect of his claim to recover overpaid SDLT.

Hannover Leasing v Revenue & Customs Commissioners [2019] UKFTT 262 (TC). Michael acted for the taxpayer in Hannover, which remains the leading authority on the scope of the SDLT general anti-avoidance rule – Section 75A FA 2003.

HM Revenue & Customs v Raftopoulou [2018] EWCA 818, [2019] 1 WLR 1528. Michael, leading Emma Pearce of chambers, appeared Pro Bono for the taxpayer in the Court of Appeal. This important case concerns the jurisdiction of the Tax Tribunal to determine disputes involving time limits and the related questions of what amounts to a notice of enquiry and closure notice.  Raftopoulou follows on from Portland Gas v Revenue & Customs Commissioners [2014] UKUT 270 (TCC), [2014] STC 2589, [2014] SWTI 2406, [2014] All ER (D) 66 (Jul) which dealt with similar issues and where Michael also appeared for the taxpayer.

Michael, leading Laura Ruxandu of chambers, acted for the taxpayer in an appeal where HMRC claimed that an employer was liable for PAYE income tax and NICs in respect of an “accommodation offset” credited to workers for national minimum wage purposes and shown on their payslips. Following representations drafted by Michael, HMRC conceded the case at the statutory Review stage, saving the client nearly £1m of tax.

Acting for the taxpayers in an appeal where HMRC are arguing that a sale of a company is chargeable to income tax under the Transactions in Securities regime and, alternatively, that if the transaction is a capital transaction then Entrepreneurs’ Relief is unavailable.

Acting for the taxpayers in an appeal in respect of the pensions taxation regime where HMRC argued that a sale and leaseback between the pension trustees and a related company was a prohibited transaction which resulted in a series of penal charges.  Michael oversaw the settlement of this case prior to trial.

Academic resources

• During 2020 Michael, leading Ronan Magee of chambers, hosted a webinar titled: Main purpose tests in anti avoidance rules. A recording of which can be viewed here.
• Two part video series on targeted anti-avoidance rules by Michael Thomas January 2022 (Practical Law Company subscription required)
• Part 1 can be viewed here
• Part 2 can be viewed here

• Pump Court Tax Chambers & Practical Law Tax video series: Tax avoidance: general anti-avoidance rules (GAARs)15 June 2021 [Practical Law Company subscription required]

• Tax Journal – A concerning erosion of rights to appeal 9 July 2019
• Tax Journal – One minute with… Michael Thomas 28 October 2016
• Tax Journal – Finance Bill 2016 changes to treatments of offshore developers and dealers in UK land 29 July 2016
• Tax Journal – Changes to treatment of offshore developers and dealers in UK land 22 April 2016
• Tax Journal – Analysis – Back to basics: Tax and professional negligence

Stamp Taxes

“Particularly highly regarded by market commentators as ‘the go-to man for stamp duty land tax.’” Chambers and Partners

Michael has been a leading authority on SDLT since its introduction in 2003 when his book, Thomas on “Stamp Duty Land Tax”, was first published by Cambridge University Press (2^nd ed. 2005).  He has advised countless times on SDLT covering all kinds of transaction and every aspect of the SDLT code.  Michael has appeared for the taxpayer in several leading cases including Hannover Leasing, the key authority on the scope of the general anti-avoidance rule, section 75A FA 2003.

In addition to SDLT, Michael also covers stamp duty, Stamp Duty Reserve Tax (SDRT) and the Annual Tax on Enveloped Dwellings (ATED).

Examples of recent and typical work:

Recent and typical advisory work

Site acquisitions for national housebuilders, often together with VAT and other taxes.  Including major developments at 9 Elms, other prime London locations and large regional sites.

Transactions involving property investment partnerships.

Application of the SDLT partnerships code in Schedule 15 FA 2003, including tiered partnerships.

Advising on the “de-enveloping” of property from corporate and trust structures.

Sale and leaseback transactions.

Surrender and regrant transactions.

Leasing transactions.

Application of the SDLT rates for residential property.

Multiple dwellings relief.

Group relief.

Incorporation of residential property investment businesses.

Litigation

Christian Candy v Revenue & Customs Commissioners [2022] EWCA Civ 1447, [2022] STC 1225 Michael, leading Quinlan Windle of chambers, appeared in the Court of Appeal for Mr Candy in respect of his claim to recover overpaid SDLT.

Hannover Leasing v Revenue & Customs Commissioners [2019] UKFTT 262 (TC). Michael acted for the taxpayer in Hannover, which remains the leading authority on the scope of the SDLT general anti-avoidance rule – Section 75A FA 2003.

Acting for the claimant in a professional negligence action in respect of a failed claim for SDLT group relief which resulted in the taxpayer client recovering a 7-figure sum on settlement of the claim.

Acting for defendants in professional negligence actions concerning SDLT advice in respect of the purchase of residential properties.

Academic resources

Michael is the author of Thomas on Stamp Duty Land Tax

• Tax Journal – A concerning erosion of rights to appeal 9 July 2019
• Tax Journal – One minute with… Michael Thomas 28 October 2016
• Tax Journal – Changes to treatment of offshore developers and dealers in UK land 22 April 2016

VAT

Michael’s VAT practice principally focusses on two areas.  One is advising on real estate transactions, where the VAT analysis is often considered alongside all other relevant taxes.  The other is VAT litigation, where Michael has acted for taxpayers in a wide variety of disputes.

Michael sits on the ICAEW Tax Faculty VAT and Duties Committee.

Examples of recent and typical work:

Litigation

Various Properties at St George Wharf and Battersea Reach London SW18

Michael successfully acted, together with Simon Allison and Justin Bates of Landmark Chambers, for two of the Respondent Landlords in this case before the Property Tribunal. The issue was essentially whether the irrecoverable VAT on the costs of staff provided by a managing agent to a landlord had been unreasonably incurred and so was unable to be recharged by the landlords to the residential tenants through service charges. The Tribunal held that the VAT on staff costs had not been unreasonably incurred.  It was reasonable for the landlords to have engaged the managing agent and they were not under a duty to undertake VAT planning.

Shields & Sons Partnership v HM Revenue & Customs [2017] 4 WLR 208 [2017] STC 2205.  Michael successfully represented the taxpayer, which had made a substantial profit from operating the special VAT Agricultural Flat Rate Scheme. This is not how that Scheme is meant to operate (it is a simplification measure)and HMRC excluded Shields from the Scheme for this reason. Nevertheless, Michael persuaded the Court of Justice of the European Union (CJEU) that the UK had failed to implement the Principal VAT Directive correctly and HMRC’s exclusion of Shields from the Scheme was contrary to EU Law. On a reference from the UK Upper Tribunal, Michael’s arguments were upheld entirely by the CJEU, following its Advocate General and France. Shields’ appeal therefore succeeded.

Michael acted successfully for a large corporate in a dispute concerning the VAT place of the supply rules where the issue was the characterisation of the supply. HMRC argued that specialist equipment supplied together with skilled staff to operate it was a supply of equipment. On receipt of Michael’s skeleton argument HMRC accepted that the supply was not characterised as the hire of equipment.

Haymarket Media Group Ltd v HMRC [2022] UKFTT 168 (TC). Michael, leading Quinlan Windle of chambers, represented the taxpayer against HMRC.  This dispute concerned a development site which was sold to a purchaser for £85m. TOGC treatment was claimed and this was disputed by HMRC.   This case is technically important because it addresses when a property development site is capable of being a TOGC as well as what amounts to what qualifies as a lettings business for these purposes.

GB Housley Limited v HM Revenue & Customs [2016] EWCA Civ 1299. Michael successfully acted for the taxpayer in this appeal which concerns HMRC’s discretion to accept alternative evidence (absent a valid VAT invoice) to allow a taxpayer to recover input tax VAT and what the remedy is when that discretion is (as there) improperly exercised. The Court of Appeal agreed that the ultimate result was that Housley’s appeal must be allowed.

Revenue & Customs Commissioners v Summit Electrical Installations Limited [2018] UKUT (TCC) 176.  Michael successfully acted for the taxpayer in this appeal which concerned whether student accommodation is zero-rated for VAT. This turned on the question of whether the relevant student accommodation was classified as a building designed as a number of dwellings. HMRC argued that the building did not qualify as a dwelling under Note 2(c) Group 5 Schedule 8 VATA 1994 because the planning permission prohibited its “separate use”. The Upper Tribunal accepted Michael’s submission for Summit that the separate use referred to is use separate from the use of other specific land. It is not enough to have a link to a business or activity. The relevant planning condition essentially required use of the building by students, primarily those studying at Leicester’s 2 universities and this did not cause zero-rating to be lost.

Obtaining a 7-figure repayment in respect of a claim, contested by HMRC, in respect of overpaid VAT for a FTSE 100 company.

Michael successfully represented the taxpayer in an appeal where the issue was whether services provided by a “debt consultancy” in the situation where it advises individual clients to enter into an IVA and introduces them to a licensed insolvency practitioner are exempt from VAT, as the taxpayer argued, or taxable, as HMRC sought to say. Michael submitted a skeleton argument which made clear that the services were correctly characterised as “exempt debt negotiation services” under EU Law (notwithstanding the UK provisions) owing to the meaning of the term “negotiation” under EU Law. Upon consideration of Michael’s arguments HMRC conceded the appeal shortly prior to the hearing.

Advice

Site acquisitions for national housebuilders, especially where VAT and SDLT are considered together.  Including major developments at 9 Elms, other prime London locations and large regional sites.

Availability of zero-rating for buildings including “Golden Brick” arrangements.

Publications

• Tax Journal – VAT on real estate: TOGCs and other hot topics 15 November 2019
• Tax Jornal – Characterising supplies for VAT following Mesto Zamberk

Private client

Michael’s private client practice has a strong property focus.  He is frequently instructed to assist landowners dispose of land which is being sold for development in a tax efficient way.  He also regularly advises – often as part of the same exercise – on the availability of business property relief (BPR) and agricultural property relief (APR) for inheritance tax.  Michael also advises on the tax treatment of offshore structures, typically involving trusts and companies, which hold UK property (of all kinds).

Michael sits on the Tax Committee of the Country Landowners Association.

Examples of recent and typical work:

Advice

Transactions in Land rules (exposures to income tax on sales of land).

Incorporation of residential property investment businesses.

Land pooling and other forms of collaboration agreement prior to the sale of land for development (Jenkins v Brown Pooling Trusts and Cross Options etc).

Business Assets Disposal Relief (formerly Entrepreneurs’ relief).

Availability of business property relief and agricultural property relief for inheritance tax.

Advising on the tax aspects of offshore structures involving trusts and companies, including how best to bring such structures to an end.

Individuals’ domicile status.

De-enveloping of residential properties out of companies and trusts into individual ownership.

Accessing Heritage Property reliefs.

Litigation

Christian Candy v Revenue & Customs Commissioners [2022] EWCA Civ 1447, [2022] STC 1225 Michael, leading Quinlan Windle of chambers, appeared in the Court of Appeal for Mr Candy in respect of his claim to recover overpaid SDLT.

Acting in an appeal where HMRC are arguing that a sale of a company is chargeable to income tax under the Transactions in Securities regime and, alternatively, that if the transaction is a capital transaction then Entrepreneurs’ Relief is unavailable.

Representing taxpayers in civil fraud investigations under Code of Practice 9.

Academic publications

Author of Thomas on “Stamp Duty Land Tax”, published by Cambridge University Press (2^nd ed. 2005)

Articles

• Tax Journal – A concerning erosion of rights to appeal 9 July 2019
• Tax Journal – One minute with… Michael Thomas 28 October 2016

Videos

• Pump Court Tax Chambers & Practical Law Tax video series: Tax avoidance: general anti-avoidance rules (GAARs)15 June 2021

Career and education

• BA in Law (1st Class)
• 1997-1998, PwC (now), Corporate Tax Department
• BCL from University College, Oxford.
• 2000-2001, Pupillage, Gray’s Inn Tax Chambers
• 2001 – 2015, Tenant, Gray’s Inn Tax Chambers
• 2015 – present, Tenant, Pump Court Tax Chambers

Publications

Author of Thomas on “Stamp Duty Land Tax” (1st and 2nd editions published by Cambridge University Press).

Memberships

• ICAEW Tax Faculty VAT and Duties Committee
• VAT Practitioners Group
• Stamp Taxes Practitioners’ Group
• Country Landowners’ Association (Tax Committee)
• Practical Law Company Consultation Board
• Revenue Bar Association
• Chancery Bar Association

What others say

Comments from Chambers Bar Guide

Taxpayer-side practitioner with a broad-based advisory and contentious tax practice, spanning business tax, indirect taxes and private client matters. He is particularly well versed in property tax matters, including stamp duty, and is an expert on corporate tax and tax treaties. Thomas is notable for the fact that during his first 13 years at the Bar he did not lose a case for either a taxpayer or any party to a civil claim where he had conduct at first instance.

“Michael is collaborative and provides clear advice.” (Chambers and Partners 2024)

“He is hugely experienced in all matters relating to real estate tax and is very astute tactically. His cross examination skills are superb.” (Chambers and Partners 2024)

“Michael has great technical ability and commercial awareness. His advice is clear, well thought out and concise.” (Chambers and Partners 2024)

“Michael is utterly fantastic – a delight to work with.” (Chambers and Partners 2024)

“His client service and relationship management skills are noteworthy.” (Chambers and Partners 2024)

‘Michael is extremely insightful at complex transactions and nuanced arguments. He is quick to establish the challenges and opportunities with a particular case. (Legal 500 2024)

‘Michael has an encyclopaedic knowledge of tax law and is very strong in advocacy.’(Legal 500 2024)

“deep expertise in tax advisory work involving transactions, acquisitions, and tax-related professional negligence procedures.” (Who’s who legal 2023)

“He gives strong commercial advice and is particularly strong on real estate-related matters.” (Chambers and Partners 2023)

“A proper technician, he’s a really sound tax lawyer, who is an organised and effective advocate.”(Chambers and Partners 2023)

“Collaborative and solution-driven,” “he is a creative, hands-on barrister who is both an excellent draftsman and advocate.” (2020)

“Practical and has an impressive knowledge of real estate taxation, particularly SDLT.” “He has a brilliant mind and really cares about the outcome.” (2020)

“His analysis is very thorough. He is clear and concise. He is good with clients and puts them at their ease.” “Excellent on property taxation. He gives straightforward, well-considered advice and is very responsive.” (2019)

“Very good to work with. He is very intelligent and commercially aware.” (2019)

“Michael’s advice is pragmatic, well analysed and sensible.” “A practical and approachable barrister.” (2018)

Particularly highly regarded by market commentators as “the go-to man for stamp duty land tax.” “Michael is an extremely articulate advocate and focuses on the key points in a case, narrowing the issues to ones which are winnable and most easily understood by the judge. When giving opinions, Michael is frank about the prospects and has usefully discouraged litigation in favour of dialogue with HMRC on a number of occasions, saving clients considerable costs and uncertainty.” (2017)

“particularly strong on real estate-related tax matters.” (2017)

“if I needed someone for advising on the tax aspects of residential property offshore I would consult him.” (2016)

“Very practical, very knowledgeable and very proactive in his advice.  He’s also very collaborative in his approach and you can always talk through issues with him.” (2015)

“He is very popular as he provides, speedy, considered responses.  He also comes back to us, tells us the risks and is positive.” (2015)

“popular choice with clients, who describe him as ‘supreme in his analysis’ and ‘a lawyer who provides solutions in a simple manner.’ He is held in especially high regard for his work in property tax, but also has a strong corporate and business tax practice.” (2012)

“a very bright, practical guy, whose strongest qualities are his attention to detail and his commercial appreciation.” (2010)

Comments from Legal 500 2018

‘He is excellent for real estate tax.’

‘One of the leading barristers on real estate taxes.’