Agassi victory overshadowed by costs pay out

Tennis superstar Andre Agassi’s five-year legal victory over the Inland
Revenue has been overshadowed after three appeal judges refused to award him
costs against the tax regulator earlier this afternoon.

Normally, the losing party in a civil action pays the other side’s costs,
however, the tax experts Agassi employed to instruct his barrister, Tenon Media,
were not solicitors or authorised litigators.

A year ago the Court of Appeal allowed Agassi’s challenge to the High Court
ruling that foreign showbusiness and sports stars on tour in Britain were liable
for UK income tax on money earned from overseas product endorsement deals – even
if the cash never sees the light of day in this country.

The court ruled that Agassi was not liable to UK tax on income paid by
sportswear makers Nike and Head Sports to his US-based company, Agassi
Enterprises Inc, because none of them was resident or had a tax presence in

It’s estimated that the judgment could cost the HM Revenue & Customs half
a billion pounds, however, HMRC is planning to challenge the ruling in the House
of Lords and has refused to pay the costs.

At the beginning of this year, sister magazine Best Practice spoke
to Julian Hedley, office managing director at Tenon Media. At he time of the
interview he said that he was convinced the Revenue was ‘over-reaching itself’.
‘We were absolutely convinced we were correct, so we went back to Agassi and his
business advisers. The amount of tax he was paying was relatively small – it was
more a case of “why should the Revenue just unilaterally decide to change its
whole approach?’.”

Agassi brought his case using the Licensed Access Scheme (LAS) designed to
provide more cost-effective legal cover for small and individual litigants.

Tenon Media’s Christopher Mills, a member of the Chartered Institute of
Taxation, instructed counsel. Tenon’s total costs bill for the High Court and
Court of Appeal are estimated to be less than £20,000.

The appeal judges heard that solicitors, who might have far less expertise in
the tax field, could well have charged three times as much.

Lords Justices Brooke, Dyson and Carnwath said that Agassi might be able to
recover some of his expenses as disbursements for ancillary assistance provided
by Tenon. But, in law, he was not entitled to claim against the Revenue for the
cost of work which would normally be done by a solicitor.

A Bar Council spokesman said: ‘It is estimated that the effect of the
judgment is that the client in this case will be able to recover up to about 41%
of the costs of the tax professional, and 71% of his total bill when using the
licensed access scheme.’

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