Bogus self-employment 'corrupts' the construction industry, union claims
A leading tax expert has warned that "entire categories" of skilled self-employed workers could be reclassified as employees if the government's published proposals for the construction industry are implemented.
The authors of research cited in a Treasury consultation paper estimated that "mass false self-employment" in the UK stands at 400,000. The UK's leading construction workers' union, welcoming the consultation, claimed that the "bogus self-employed" are denied basic employment rights and that "lower safety levels" on building sites which use the bogus self-employed put workers at "far greater risk of being injured or killed".
The Treasury invited comments by 12 October on proposals, set out in the July 2009 consultation paper "False self-employment in construction: taxation of workers", proposing legislation to recover an estimated loss to the exchequer of £350m per annum.
Bank code is the wrong solution, critics claim
The government's draft code of practice on taxation for banks is an attempt to override statute as the governing force of taxation in the UK, a leading tax body has claimed. The Chartered Institute of Taxation said it had long objected to "tax[ed] by law, untaxed by concession" and was similarly opposed a code that seems to attempt to "tax by code that which is untaxed by law".
Some banks are still engaged in various forms of tax avoidance, although "highly complex tax avoidance transactions" have become less prevalent since the financial crisis triggered by a global "credit shock" in 2007, HMRC said in a consultation paper.
Bloomberg.com has reported that, according to advisers to some of the UK's biggest banks, the Financial Services Authority was asking the banks in the course of inspection visits "how they structure themselves to minimise tax payments and what tax advice they give corporate clients".
OECD signals rapid progress in push for transparency
The OECD has undertaken to make further rapid progress towards transparency in international tax matters, after a period of "unprecedented action" to implement its "globally endorsed" standards of transparency and exchange of information. But critics claimed that fundamental reforms were needed to tackle a "global [tax] haven industry".
Leaders of the G20 group of major industrialised and developing economies declared a commitment to maintain the current momentum in dealing with tax havens, money laundering and the proceeds of corruption.
The Tax Justice Network welcomed the G20's "renewed commitment to cleaning up tax havens" but said the G20 needed to do much more to translate the commitment into reform. The commitment "relied excessively" on the OECD's Global Forum on Transparency and Exchange of Information.
"That program, while helpful, has so far been limited to requiring tax havens to agree to provide information 'upon request'. As experience has shown, this approach is costly, time-consuming, and a very poor deterrent," the TJN argued.
This week's issue of Tolley's Practical Tax newsletter (9 October) has more on these and other developments.
