Clifford Chance is claiming a lobbying victory for its bank clients after the government last week tabled an amendment to the Finance Bill.
The amendment will delete a controversial clause which would have given Customs & Excise new powers to collect tax from anyone who owes money to a tax defaulter.
The proposal would have allowed Customs to recover money from banks which had a VAT defaulter's money on deposit, without the need of a court order.
The draft proposals were spotted by Clifford Chance property consultant Richard Coleman, who brought it to the attention of Richard Thomas, head of the firm's public policy unit.
He put together a team of tax, banking and property lawyers which produced a memo which he circulated to clients.
He also teamed up with the British Bankers Association to lobby Parliament.
“It's a good example of how my department can be of use,” said Thomas.
“Lawyers can intervene in the process of drafting legislation. In this case the government just hadn't fully thought out the implications.”
Several law firms with property clients will be pleased that amendments have also been tabled to reduce the effect of the closure of a VAT loophole in commercial property which the property industry argued would have penalised developers.
Nabarro Nathanson and other firms with large property departments have been lobbying against the proposed loophole closure.