G7 finance ministers meeting in London reached a “seismic agreement” on global tax reform that will mean “the largest multinational tech giants will pay their fair share of tax in the countries in which they operate”, the UK’s G7 presidency announced on 5 June.
The UK government rejected the House of Commons Treasury Committee’s call for consultation on a draft tax strategy and has been asked for “a clearer explanation” of its response, committee Chair Mel Stride said.
The committee appreciates “the difficulty in pre-announcing tax policy” but it is disappointing that “the government has rejected our recommendations to improve the approach to tax strategy, when the evidence was overwhelmingly in favour”, he said.
Serious and urgent work is needed to prevent any “mass shift of contractors” into loan arrangements via umbrella companies in response to changes in U.K. off-payroll legislation, according to the Low Incomes Tax Reform Group (LITRG).
But the “general poor reputation” of umbrella companies does not uniformly match the reality and is “not deserved by many in the sector,” Victoria Todd, head of LITRG, said in a March 24 release.
LITRG’s 150-page report explains how umbrella companies and other intermediaries operate in the U.K. labour market, devotes two chapters to “the benefits and complexities” of umbrella companies, and explores the use of disguised remuneration schemes. The report, based largely on research conducted in November 2020, acknowledges financial support from the Trades Union Congress…
Read more: My news story for Tax Notes, March 26 (paywall).