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.

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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.

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‘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.

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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. 

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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.

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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’.

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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.

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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.

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.

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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.