MPs to vote on Office of Tax Simplification appointments

Senior appointments to the Office of Tax Simplification are to be put to a vote of members of Parliament, the UK government announced as it rejected a proposal to give the cross-party House of Commons Treasury Committee a power of veto.

During a Finance Bill debate on September 6, MPs considered an amendment, proposed by Labour MPs, that would have prevented the chancellor from appointing the OTS chair or tax director without the committee’s consent …

Financial Secretary to the Treasury Jane Ellison told the debate that the government will ensure that the Treasury Committee can hold hearings with future OTS chair candidates before their appointments are formalized, and that appointments are put to a vote in the House of Commons.

Read more: My news story for Tax Notes 8 September (paywall) published by Tax Analysts.

 

UK paves the way for public country-by-country reporting but stresses multilateral approach

Tax transparency campaigners have welcomed the UK government’s decision to accept a Finance Bill amendment that will enable HM Treasury to make regulations requiring large multinationals to publish country-by-country reports of their profits and taxes. The government, however, stressed that it intends to seek international agreement on a reporting model before using the new power.

Customers and taxpayers expect big companies to “play fair by them and by the country in which they operate,” Labour member of Parliament Caroline Flint said during a House of Commons debate on September 5. “It sometimes seems as though we are trying to catch jelly.”

Read more: My news story at Tax Notes 7 September (paywall) published by Tax Analysts.

UK lawmakers to debate public country-by-country reporting as tax expert urges caution

Members of the U.K. Parliament have been urged not to risk “confrontation” with U.S. lawmakers by breaking ranks on public country-by-country (CbC) reporting, as they prepare to debate for a second time a finance bill amendment that would pave the way for mandatory public CbC reporting by large multinationals.

MPs defeated a similar amendment in June by just 22 votes. Labour MP Caroline Flint’s revised amendment, set to be debated on September 5 or 6, has the support of a cross-party group of 60 MPs.

Then-Financial Secretary to the Treasury David Gauke told Flint during the June 28 debate that the government shared her aims of increasing transparency and clamping down on avoidance. The government had “led the way in calling at an international level for public CbC reports,” he said. But Gauke argued that the amendment was technically flawed and that there would be “disadvantages for the U.K.” if Parliament acted unilaterally.

Read more: My news story for Tax Notes, 3 September (paywall) published by Tax Analysts.

Chancellor strengthens tax simplification team ahead of independence debate

Leading tax commentators have welcomed the appointment of three new non-executive directors to the board of the UK’s Office of Tax Simplification (OTS). The appointments were announced as MPs were set to debate a finance bill amendment intended to ensure that the OTS is seen to be independent of the government.

OTS Chair Angela Knight said the new directors’ skills and experience will increase the office’s ability to provide “excellent advice on how to take forward the strategy and simplify the tax system for business and for individuals”.

Read more: My news story for Tax Notes 29 August (paywall) published by Tax Analysts.

UK tax practitioners question 15% corporation tax target

After Chancellor of the Exchequer George Osborne said that he wants to set a target rate of less than 15 percent, tax practitioners suggested that further reductions in the U.K.’s corporation tax rate are not a top priority for businesses and may not have the desired effect.

Osborne is planning to “slash corporation tax” in order to woo businesses deterred from investing in a post-Brexit Britain, the Financial Times said in a July 3 report, noting that the move could alienate voters.

The Confederation of British Industry welcomed the announcement. “The chancellor is right to be considering moves that support economic growth and send out the signal that the U.K. is open for business at this critical time,” said CBI chief economist Rain Newton-Smith.

Read more: My news story for Tax Notes, 6 July (paywall) published by Tax Analysts. Stephanie Johnston contributed to this story.

Does the UK need even more corporation tax cuts?

George Osborne has told the Financial Times that he wants to set the lowest corporation tax rate of any major economy, announcing “a target of 15%”. The current rate is 20%. The paper reported that:

[Osborne] said Britain should “get on with it” to prove to investors that the country was still “open for business”.

The FT added that before the EU referendum the chancellor had “threatened to make £30bn of tax rises or spending cuts” in a post-Brexit emergency Budget:

He is now striking a more cautious note, awaiting official forecasts before announcing any new measures in the Autumn Statement.

The FT also noted that the move could alienate some voters, and Labour’s shadow chancellor John McDonnell has tabled an urgent question for today, 4 July, on the corporation tax proposal. Continue reading

UK lawmakers approve corporation tax cut

The UK’s low corporation tax rate attracts jobs and investment, and it would be a grave mistake to cancel a further cut to 17 percent planned for 2020, Financial Secretary to the Treasury David Gauke warned members of Parliament before they approved the cut by a vote of 308 to 255.

A Committee of the Whole House completed its consideration of the finance bill June 28 after several hours of debate. MPs defeated by just 22 votes an amendment implementing public country-by-country reporting, and defeated by 37 votes a new clause on tax transparency moved by Margaret Hodge, Labour MP and former chair of the House of Commons Public Accounts Committee.

Read more: My news story for Tax Notes, 30 June (paywall) published by Tax Analysts.