Andrew Goodall

Campaigners upstage tax professionals at transparency forum

Country by country reporting could lift the lid on tax havenry, as I said here. The reform was one of several issues discussed at a tax and transparency forum this week. More on that very soon ... In the meantime, this is how I summarised for Tax Journal what was an important contribution to the crucial debate on international tax evasion and avoidance:

The divide between tax professionals and tax justice campaigners on the issues of transfer pricing and country by country reporting by multinationals was laid bare at a ground-breaking ‘tax and transparency forum’ attended by more than 200 people in London yesterday.

The speakers at the forum hosted by International Tax Review included Pascal Saint-Amans, Head of Tax Policy and Administration at the OECD; heads of tax at BP, Shell and Reed Elsevier; James Bullock of the law firm Pinsent Masons; and tax justice campaigners including Richard Murphy and representatives of ActionAid and Christian Aid.

Finance Bill does little for small companies, says ICAEW chief | Tax Journal

Small businesses are ‘tomorrow’s Dysons and Microsofts’ and they need government support ‘as much if not more than the big businesses that have already made it’, ICAEW Chief Executive Michael Izza has said. The ICAEW’s verdict on the Finance Bill was that it would help large companies and international competitiveness but do ‘little for SMEs’, Izza wrote last week on his ICAEW blog.

via www.taxjournal.com

Barclays discloses UK corporation tax liability | Tax Journal

Barclays has voluntarily disclosed that its UK corporation tax liability for 2011 was approximately £300m.

The bank said in its ‘citizenship report’ that it recognised the need to reflect a ‘changing approach’ to the taxation of corporates in the way it managed its future tax affairs. ‘The UK taxes borne in 2011 included corporation tax of £0.3bn plus bank levy of £0.2bn paid to HMRC,’ it said.

Barclays noted that ‘many commentators’ sought to compare the taxes paid in a year in a specific country to the profit generated in that country, to test whether the tax paid was ‘fair’. This was not a straightforward exercise for timing-related reasons, it said.

via www.taxjournal.com

Finance Bill: Gauke defends corporation tax rate reduction | Tax Journal

Clause 3 (personal allowance for 2012/13 for those aged under 65), clause 5 (main rate of corporation tax for financial year 2012) and clause 6 (corporation tax charge and main rate for financial year 2013) of the Finance Bill were agreed by the Public Bill Committee on 26 April.

Owen Smith, the Shadow Exchequer Secretary, moved amendments to clauses 5 and 6 that would have required the government to review the impact of the corporate tax structure on different sectors and on growth, jobs and investment; and to review ’the evidence in favour of using reductions in the headline rate of corporation tax as a means of promoting long term international competitiveness’.

The government had invested ‘enormous faith’ in the competitiveness of the tax system being ‘arguably the principal driver’ of the economy in the coming years, Smith argued. The headline rate was only one tool that the government had to consider in terms of competitiveness.

via www.taxjournal.com

People and the planet report | Royal Society

Rapid and widespread changes in the world’s human population, coupled with unprecedented levels of consumption present profound challenges to human health and wellbeing, and the natural environment. This report gives an overview of how global population and consumption are linked, and the implications for a finite planet.

via royalsociety.org

Posted without comment ... just a link.

MPs' inquiry into taxation in developing countries hears from SABMiller and Glencore

Several key issues in the tax and development debate were discussed at length this week at a hearing of the Commons International Development Committee, including country by country reporting, transfer pricing, tax havens and information exchange. Here is today's Tax Journal news report in full:

Transparency drive will not deliver the ‘right amount’ of tax, says SABMiller chief

Tax Justice Network says the current regime for taxing multinationals is ‘not fit for purpose’

Increasing tax-raising capacity and expertise is the key to helping developing countries to collect the ‘right amount’ of tax from the multinationals, SABMiller’s CEO Graham Mackay told MPs this week. Country by country reporting of profits and taxes paid could provide an ‘enormous’ amount of detail, but given the complexity of international corporate taxes it would remain ‘extremely difficult’ to judge whether the right amount had been paid, he suggested.

BBC apologises to Philip Green after Cameron interview

The BBC’s Today programme broadcast an apology to Sir Philip Green, following Monday’s interview with David Cameron in which John Humphrys sought to establish what the government meant by the term ‘aggressive tax avoidance’.

via www.taxjournal.com

Government 'must clarify what it means by aggressive tax avoidance’

‘Cameron digs deeper hole trying to define morally repugnant’

via www.taxjournal.com

Sam Coates at The Times noted that at a stroke, the PM 'appeared to impugn everyone who structures their affairs using a company in order to take advantage of the disparity between corporation tax and income tax, an anomaly which has existed since corporation tax was created in 1965'.

Setting up a company can amount to ‘aggressive tax avoidance’, Cameron tells BBC | Tax Journal

Setting up a company specifically to avoid tax is ‘aggressive tax avoidance’ and should be distinguished from investment in pensions or genuine start-up businesses, the Prime Minister suggested today.

Anti-avoidance rules to counter the use of personal service companies to disguise employment income have been in place since 2000. For those in genuine self-employment, a significant financial incentive to incorporate a business has existed for many years.

In its interim review of small business taxation, published last year, the Office for Tax Simplification noted that the continued operation of separate systems for income tax and NICs ‘leads to a number of anomalies that provide incentives to distort behaviour [and] decisions being taken that are wholly tax driven’.

via www.taxjournal.com

UK businesses are ‘perfectly entitled’ to operate in low-tax countries, says CBI | Tax Journal

The question whether business pays its ‘fair share’ of tax is a perfectly legitimate one that deserves a good answer, John Cridland said at the launch of a CBI campaign to bring ‘an informed voice’ to the UK business tax debate.

via www.taxjournal.com

There are several issues here too (see CBI supports anti-abuse rule and defends ‘tax management’) ... including tax competition (which the CBI backs) and country by country reporting (which is not mentioned in the CBI report). More soon ...