A continuing lack of transparency in the UK’s overseas territories and crown dependencies will significantly hinder efforts to curb global corruption, and more must be done to ensure that developing countries’ voices are heard on international tax reform, according to a cross-party committee of members of Parliament.
The International Development Committee welcomed the work done by the OECD through its flagship base erosion and profit-shifting project. “However, international tax discussions must be fully reflective of international concerns, including those of developing countries, and we remain concerned that the OECD – due to its composition – is not adequately reflecting the needs of the poorest countries in its policy outcomes,” the committee said in a report titled “Tackling Corruption Overseas,” published October 19.
Read more: My news story for Tax Analysts October 20 (paywall).
The UK’s Office of Tax Simplification should focus on preventing rather than curing complexity, according to tax professionals responding to the office’s “high-level strategy” consultation. The OTS says that while its mandate does not extend to a “formal say” on future policy, its goals include embedding simplification into the policy-making process. One expert told Tax Analysts that given the right focus and resources, the OTS could “hold the key to wholesale reform.”
Read more: My news story for Tax Analysts October 15 (paywall).
A loss of confidence in the performance of Concentrix led to the decision not to extend its contract, Jon Thompson, HMRC chief executive and permanent secretary, told the House of Commons Work and Pensions Committee. Thompson spoke during an evidence session on October 13, two days after the Public Accounts Committee (PAC) opened an inquiry into HMRC’s performance. The PAC has invited submission of written evidence by midday on October 18.
HMRC engaged Concentrix’s Belfast office to check entitlement to tax credits. In the middle of August, Concentrix’s performance in answering the telephone was “dramatically reduced,” with fewer than 10 percent of calls being answered, and the amount of time taken to get through to staff rose to more than 30 minutes, Thompson said. Philip Cassidy, Concentrix’s senior vice president, told the committee that the company apologised to four tax credits claimants who spoke earlier in the evidence session and to “all the other [claimants] that were impacted.”
Read more: My news story for Tax Analysts October 14 (paywall).
UK government proposals to penalise enablers of tax avoidance schemes could prevent some taxpayers from getting expert advice on complicated issues, according to the Chartered Institute of Taxation. The proposed penalties should be better targeted at those who deliberately seek to profit from avoidance, CIOT said in an October 12 press release.
Separately, Michael Izza, chief executive of the Institute of Chartered Accountants in England and Wales, has warned that politicians have unfairly singled out accountants in their criticism of professional advisers over avoidance.
Read more: My news story for Tax Analysts, October 13 (paywall).
A proposed new tax system for small companies would increase uncertainty and confusion among small business owners and increase the scope for errors, UK tax experts said in response to consultation on the merits of a “look-through” model.
The UK already has two complicated systems, one for unincorporated businesses and one for corporate bodies, the ICAEW Tax Faculty noted a submission to the Office of Tax Simplification. “Rather than introduce a new model we would support simplification in each area,” the Faculty said. The Chartered Institute of Taxation said a key effect of a mandatory look-through system appeared to be to generate an increased tax yield from small business.
Read more: My news story for Tax Analysts, 8 October (paywall).
And there’s an interesting discussion on Twitter, in response to this tweet:
The Labour Party will rewrite the rules of the U.K. economy to the benefit of working people and end the “scourge” of tax avoidance, Shadow Chancellor of the Exchequer John McDonnell told the party’s annual conference in Liverpool September 26.
“We can’t run the best public services in the world on a flagging economy with a tax system that does not tax fairly or effectively,” McDonnell told delegates two days after the party re-elected Jeremy Corbyn as leader following a fierce and divisive election campaign. Corbyn won almost 62 percent of the vote, beating center-left challenger Owen Smith.
Read more: My news story for Tax Analysts, 27 September (paywall).
The Welsh government is consulting on anti-avoidance measures targeting land transaction tax (LTT) relief and artificial arrangements entered into to avoid tax.
The Welsh Revenue Authority, which is expected to be established next year, will be responsible for the collection and management of the LTT and will undertake most of the collection and management functions for landfill disposals tax. The new taxes will replace the U.K.’s stamp duty land tax and landfill tax from April 2018. The Land Transaction Tax and Anti-Avoidance of Devolved Taxes (Wales) Bill, introduced in the National Assembly for Wales September 12, sets out measures to tackle avoidance of the devolved taxes.
Read more: My news story for Tax Analysts, 20 September (paywall).
New and complex tax compliance requirements pose major risks for financial institutions, some of whom may find it difficult to maintain sufficient expertise in a fast-changing regulatory environment, experts told the 14th Automatic Exchange of Information Tax Congress hosted by Osney Finance.
Some clients, having prepared for reporting under the U.S. Foreign Account Tax Compliance Act, believe they don’t need to worry about the common reporting standard (CRS), said Denise Hintzke, global FATCA tax leader at Deloitte. She highlighted differences between the two regimes and told delegates at the London event why they do need to worry about the CRS …
Read more: My news story for Tax Analysts, 17 September (paywall).