University: University of Oxford
Virtually all commercial transactions have tax implications. Corporate tax is thus an important practice area for any major law firm. Working in corporate tax involves advising on the most tax-efficient means of acquiring, selling or restructuring assets, negotiating and documenting the transaction, and ensuring the smooth completion of the deal. On the contentious side, corporate tax lawyers advise on all aspects of tax litigation and investigations, including negotiating with tax authorities.
“I was an all-rounder at school, so when it came to choosing a degree subject at university, nothing that I had studied previously stood out as my best area,” says Kate Worthington on her route into law. She was on the lookout for something new and the well-rounded nature of a law degree presented itself as a natural fit. “It involves a range of skills and opens a number of career options,” she explains. “The variety suited me perfectly.”
Kate completed her training contract at Lovells (now Hogan Lovells), then joined Lawrence Graham upon qualifying (the firm would later merge with Wragge & Co, which then itself merged to become today’s Gowling WLG). At four years’ qualified, she joined top City firm Stephenson Harwood. “I wanted to be part of a leading firm with a full-service offering,” she says on the reasons for her decision. “I had also developed a specialism in real estate tax and funds, two areas that Stephenson Harwood excels in, so it was a good match. I really enjoy working in tax law and because the tax team at the firm is so well regarded, I knew that I would have opportunities to do varied, high-quality work.”
As well as the top clients – a mix of “corporate entities, alongside listed funds and individual business owners” – and legal expertise, the smaller size of the tax team is a key draw for ambitious tax lawyers. “At the moment there are two partners and four associates in the corporate tax part of the team, which means that we get to do everything,” Kate enthuses. “At some other firms, because they have much larger tax teams, you tend to narrow your specialism but here you are able to experience huge variety – you can be doing a commercial negotiation one day and a close analysis of a difficult technical issue the next.”
The team’s work can broadly be divided into the three types. The first and main type of work is transactional, which involves “the buying and selling of assets such as real estate or shares in companies.” Kate explains that “in these types of transaction, my role is to assess the tax consequences for the client and also negotiate the tax provisions in the contract dealing with the allocation of tax risk among the parties.” At senior associate level, there is more responsibility for “managing transactions day to day and working alongside a junior member of the team.” About 60% of her practice is made up of this kind of matter.
“Pure advisory work” is the second type. “Clients frequently come to us with questions about the tax aspects of their strategic decisions,” she explains. “For example, when a client is planning how to organise and structure a group of companies, it will seek advice on the tax consequences.” The third, smaller, category is contentious work. These rarer cases involve the full spectrum of dispute resolution including, sometimes, full litigation between a client and HMRC when there is a disagreement about how much tax the former should pay.
Differences of opinion on taxation are of course far from exclusive to tax lawyers. “This area is always topical because it is a big political issue and it is constantly changing,” Kate observes. “The government sets a new Budget every year, and in 2021 we have seen Rishi Sunak in the March budget reveal new tax measures as part of the economic response to covid-19. Tax policies are often at the centre of politics and it is relevant to so many different areas of law.” On that front, “the increasing globalisation of tax laws is an interesting trend,” says Kate. “The way that different countries are coming together to tackle the issue of well-known companies that may be taking advantage of tax rules in order to pay as little tax as possible is certainly worth watching closely.”
You not only need a good grasp of the technical detail of tax to advise clients properly; you also need to be able to fit those technical details into the much bigger picture of the UK and sometimes international tax systems.
Overall, tax is an area that is highly intellectually stimulating as well as challenging. “There is no point in trying to do tax unless you are interested in it – keeping up with it all should be enjoyable,” insists Kate. For those who become hooked, it offers an appealing combination of granular minutiae and grand strategy: “You not only need a good grasp of the technical detail of tax to advise clients properly; you also need to be able to fit those technical details into the much bigger picture of the UK and sometimes international tax systems.”
Her advice for budding tax lawyers? “This is going to sound really trite but when I was a student, I didn’t appreciate the extent to which all the areas of law covered in a law degree stay relevant when you are practising – those years at university are not just about passing exams. Especially in tax, for which you need an understanding of a variety of areas – I am regularly going back to the basic principles of trusts, land and contract law.” These insights should be more than enough to pique the interest of someone with the interests and skills to make a rewarding career as a tax solicitor. Kate closes with some general advice for those applying for training contracts: “The most important factor when you are applying is to think carefully about the type of firm you want to work for, what broad areas of law might interest you and tailor your application to the particular law firm, rather than cutting and pasting the same application to different employers. It all comes back to having a genuine passion for law and focusing on what and where you want to practise.”