Andrew Goodall

'Attacks' on HMRC over PAYE are unfounded, say tax experts | Tax Journal

Attacks on HMRC for making 5.1m ‘errors’ in people’s tax for 2011/12 are unfounded, the CIOT’s Low Incomes Tax Reform Group has warned. HMRC announced last week that around 3m taxpayers were about to receive tax refunds, ‘two months earlier than last year’. The annual PAYE reconciliation was ‘starting earlier than ever before’, the department said.

But The Times reported that up to 1.6m people would be ‘hit with an unexpected tax demand averaging £537 after they were charged the wrong amount by HMRC’. A Daily Mail headline said 1.6m people would owe HMRC £537 ‘thanks to blunders’.

HMRC had pointed out that the reconciliations were a normal part of PAYE processing. Around 85% of taxpayers had the correct amount of tax deducted from pay during the year, but adjustments were needed for the other 15% to take account of changed circumstances such as a new job or a gap between periods of work.

via www.taxjournal.com

Panorama’s ‘truth about tax’ was misleading, says GSK | Tax Journal

The government makes its own decisions on tax policy and does not take lectures from big business, the CBI’s Director General has told a BBC Panorama programme investigating ‘massive tax savings’ made by multinationals through transactions with Luxembourg subsidiaries. GlaxoSmithKline said in a statement that the programme was ‘extremely misleading and lacking in context’.

John Cridland rejected the suggestion, put to him by the BBC’s Darragh MacIntyre, that it was ‘blatantly clear’ that big business had a ‘disproportionate influence’ on government policy. MacIntyre noted that the government had invited large companies, including some that had been ‘in dispute’ with HMRC, to consult on reform of the UK’s controlled foreign companies (CFC) rules.

via www.taxjournal.com

‘Tax inspectors without borders’ will mobilise expertise for developing countries | Tax Journal

A new initiative to provide international auditing expertise and advice to help developing countries ‘better address tax base erosion, including tax evasion and avoidance’ has been launched by the OECD’s Informal Task Force on Tax and Development.

Stakeholders from business, civil society, developing country governments and the OECD attending last week’s meeting of the task force in South Africa welcomed the launch of ‘Tax Inspectors Without Borders’, and agreed to work together to launch an independent organisation to host a secretariat by the end of 2012, the OECD said.

via www.taxjournal.com

The great tax debate: ActionAid UK

An event yesterday evening in the City of London brought together tax policy experts from big multinational companies, accountancy firms and law firms to discuss the big issues in tax over the next few years.  The event was aptly titled The Great Tax Debate. Topics included such things as transfer pricing, taxing financial transactions, simplifying the UK tax system and the general political environment. There seemed to be consensus that tax – especially company tax – has a much higher public profile now than ten years ago. ActionAid supporters have definitely played a part in this!

via www.actionaid.org.uk

Were you there? I wasn't. Share a thought below ...

Tax avoidance disclosures edge upwards ahead of GAAR consultation | Tax Journal

Seventy-seven disclosures of tax avoidance schemes were received by HMRC in the six months to 31 March 2012, according to provisional figures released on 1 May. There were 138 disclosures in the financial year to 31 March 2012, showing a slight increase on the previous year. 

via www.taxjournal.com

Country by country reporting is essential for detection of tax avoidance, say MEPs | Tax Journal

Country by country reporting of profits and taxes paid is ‘essential’ for detecting corporate tax avoidance, according to MEPs who adopted by 538 votes to 73 a resolution on ‘concrete ways to combat tax fraud and tax evasion’. There were 32 abstentions.

via www.taxjournal.com

Common corporate tax base should be compulsory for large groups, say MEPs | Tax Journal

A common consolidated corporate tax base should be compulsory for all companies except SMEs after a transitional period, according to a resolution of the European Parliament approved last month by 452 votes to 172, with 36 abstentions.

The Parliament approved a European Commission proposal for a Council Directive on a CCCTB, which would provide a single set of rules for calculating taxable profits but would not impose common tax rates. EU tax commissioner Algirdas Šemeta welcomed the Parliament's ‘very strong support’ for the proposal. It would save EU businesses billions of euros and help attract more foreign investors into Europe, he said. Businesses had been calling for the CCCTB to be introduced ‘as quickly as possible’.

George Bull, Senior Tax Partner at Baker Tilly, said that making the regime obligatory for large groups would remove one of the objections to the CCCTB, that ‘far from simplifying European tax compliance, a voluntary system would have added complexity by creating a 28th, transnational alternative’.

via www.taxjournal.com

Offshore avoidance and evasion cause serious harm, says Parliamentary Assembly of the Council of Europe | Tax Journal

The Parliamentary Assembly of the Council of Europe has warned that ‘massive’ offshore tax evasion and avoidance cause ‘serious harm to the public interest’ in Europe and elsewhere, and particularly in developing countries. It recommended a series of reforms, including country by country reporting by multinationals in all business sectors.

via www.taxjournal.com

'Measured analysis' points to country by country reporting

I suggested the other day that the regime for taxing multinational companies may be in need of an overhaul, and I backed country by country reporting of profits and tax paid.

So I was pleased to see John Andrews describe my post as a 'measured analysis of multinational tax planning'. He founded the Chartered Institute of Taxation's Low Incomes Tax Reform Group and he knows more than enough about tax policy and administration to recognise 'measured analysis' when he sees it. His tweet and a few others are reproduced below.

This a difficult issue but there is a huge public interest in getting it right, especially for the world's poorest countries. Until very recently the debate has been virtually one-sided. What do you think?

Tax avoidance, poverty and country by country reporting

A Financial Times editorial noted a while ago that country by country reporting might expose what it called ‘the scandalous tax treatment of multinationals in the rich world’. The editorial published on 22 December 2010 said:

‘Current practice turns corporate tax largely into a voluntary gesture by the well-run multinational, whose methods of choice for locating income in lower-taxed jurisdictions are intragroup financial links and transfer pricing of intangibles such as intellectual property. As finance and intangibles grow in importance, so will the slipperiness of the corporate tax base.’

During the last two weeks I’ve listened to almost 12 hours of discussion and debate on tax and transparency, where the focus has been on the impact of tax avoidance on developing countries. I’ve reported very briefly for Tax Journal news on the Commons International Development Committee (IDC) hearing of 24 April and International Tax Review’s excellent Tax and Transparency Forum, held on 2 May.

And I’ve read ActionAid’s report Calling time: Why SABMiller should stop dodging taxes in Africa. It is essential reading for anyone with an interest in tax or development or both – in theory at least, this means everybody. Certainly, if you have any doubt that there is a clear link between tax avoidance and poverty in developing countries, you should read it.

All of this has been enough to convince me that country by country reporting of profits and taxes paid – an idea developed by Richard Murphy and supported by many NGOs – should be written into international accounting standards. The UK government should be pushing for this reform if it is serious about tackling tax avoidance, but the signs are that it is more interested in tax competition.