Armstrong Watson has appointed Paul Russell as head of VAT and indirect tax.
Paul joins with more than 27 years’ experience in VAT and other indirect taxes, having worked at HMRC for 16 years before moving into practice and holding senior positions with BDO and RSM.
With experience spanning compliance, complex technical queries, strategic VAT planning and risk management, as well as high-value projects focused on identifying efficiencies, managing exposure and embedding robust VAT solutions, the firm said Paul’s vision was to establish its Indirect Tax team as the leader in VAT advisory across Northern England and Scotland.
HMRC is intensifying enforcement action in a bid to close the UK’s £46.8bn tax gap.
HMRC opened almost 12,000 probes into large companies in the 12 months to March 2025, a 31% increase, according to a Freedom of Information request by law firm Pinsent Masons.
The rise in tax investigations follows increased government funding for HMRC compliance teams and a renewed emphasis on reducing the UK’s £46.8bn tax gap, with scrutiny increasingly focused where potential recoveries are highest.
Analysis of the FOI data shows almost one in three large UK companies has faced a VAT investigation in the last year, and in completed investigations into the largest businesses, average recoveries exceeded £8m per case, underlining the scale of exposure when VAT positions are challenged.
Paul said:“We are seeing a clear shift in HMRC’s approach. Investigations are more frequent, more detailed and increasingly focused on judgment and interpretation rather than obvious mistakes. For many businesses, the first indication of a problem is no longer a routine query but a full HMRC investigation.
“The financial exposure can be significant, but so too can the disruption to management time and the reputational impact.
“Taking a proactive approach to VAT risk has never been more important.”
VAT is now a strategic risk issue for boards and finance leaders – moving beyond a compliance-only concern and Armstrong Watson said that many recent challenges arose from technical and legal interpretation of complex VAT legislation rather than simple clerical errors.
Areas such as partial exemption, zero-rating, cross-border transactions, land transactions and sector-specific VAT treatments are increasingly under investigation.
Armstrong Watson said: “Where organisations operate across multiple jurisdictions or have evolving supply chains and business models, Paul is particularly adept at helping clients navigate cross-border indirect tax risks, obligations and opportunities.
“Drawing on his HMRC background, he also has a unique understanding of how enquiries are approached and how decisions are formed – helping clients navigate interactions with HMRC.”
Becky Bowness, head of tax, said: “Paul is an outstanding addition to our leadership team. He brings a rare combination of deep technical VAT expertise, senior advisory experience and first-hand HMRC insight – exactly the mix our clients need as the indirect tax landscape becomes more complex and increasingly scrutinised.
“His professionalism, calm approach and ability to translate technical issues into practical, commercial advice is exceptional. We’re delighted to welcome him, and we’re excited about the strength and ambition he brings to our VAT and indirect tax offering.”
Paul said: “Armstrong Watson’s ambition, culture, and its brilliant client base immediately stood out to me.
“My goal is to build the leading indirect tax practice across the North and Scotland, setting the benchmark for VAT advisory.
“I’m excited to embed VAT expertise more deeply across our offices, strengthen the support we provide to clients, and create a team that is delivering exceptional expertise and becoming an indispensable partner to our clients.”.
