The Scottish budget has heaped more complexity on an already complex income tax system. There are to be two new rates for taxpayers on low and middle incomes.
Already, a UK taxpayer may have income that is charged at default rates, savings rates and Scottish rates. These rates include:
the default basic rate, the default higher rate, the default additional rate, the savings basic rate, the savings higher rate, the savings additional rate, the starting rate for savings, the savings nil rate, the dividend nil rate, the dividend ordinary rate, the dividend upper rate, and the dividend additional rate …
That list is drawn from a quick look at sections 6 to 16 of the Income Tax Act 2007, as revised, published in Tolley’s Yellow Tax Handbook. (Other handbooks are available.) Continue reading Tax is really complex, but where is the law?
Members of Parliament will have time to fully scrutinise the UK finance bill’s measures, Financial Secretary to the Treasury Mel Stride insisted after opposition MPs claimed that the government is seeking to avoid “proper scrutiny and transparency.”
Stride rejected opposition claims that the government is restricting the scope for amendments as MPs debated the bill at its second reading on December 11. Scottish National Party MP Kirsty Blackman asked why the government did not present an “amendment of the law” resolution for debate after the autumn budget on November 22.
My news story for Tax Analysts, December 14 (paywall)
My Tax Analysts news story on the debate hosted by the Women in Tax network on November 20 is now free to view.
Governments considering how multinationals should be taxed must address the erosion of public trust in tax administrations, while businesses continue to stress the importance of certainty in tax matters, panellists told a conference hosted by the Women in Tax network at Pinsent Masons’s London office.
Governments considering how multinationals should be taxed must address the erosion of public trust in tax administrations, while businesses continue to stress the importance of certainty in tax matters, panellists told a conference hosted by the Women in Tax network at Pinsent Masons’s London office November 20. Alexandra Readhead, an international tax and extractive industries consultant, said multinationals should be taxed “in a way that creates resources for public trust.”
Lizzie Arnold, a senior policy adviser at HM Treasury, outlined the UK government’s perspective on the taxation of multinationals. She described three aims, the first of which is to create a competitive corporate tax system … Giorgia Maffini, senior tax economist at the OECD, noted that residence and source are the two principles that define how multinationals are taxed. “We are trying to understand whether it’s time to think of another principle,” she said … Corporations are looking for “a bedrock of certainty” to provide stability, said Anna Elphick, vice president of tax for Asia and Africa at Unilever. Read more:
My news story for Tax Analysts, November 22 (paywall)
More could be done to tackle tax avoidance and evasion, but it is important not to tar all offshore activity with the same brush in the wake of the Paradise Papers, UK tax professionals suggested. One expert said simplification could reduce opportunities for those who seek to abuse the system.
As UK lawmakers and campaigners stepped up demands for greater transparency, Jonathan Riley, head of tax at Grant Thornton UK LLP, told Tax Analysts that the controversy “may represent the last chance for the tax profession to show it takes evidence of artificial tax avoidance seriously and will not promote it.” Riley noted that advisers are subject to many disclosure and compliance rules but tax is “still largely self-regulated.” It will be interesting to see whether the tax and accountancy bodies’ code on Professional Conduct in Relation to Taxation, updated with effect from March, is invoked in any cases featured in the Paradise Papers, he said. Read more:
My news story for Tax Analysts, November 17 ($)
While the UK government continued to defend reductions in the corporate tax rate, a new campaign group called on ministers to champion the role of tax in building a civilised and fair society and to stop trying to compete for investment through “tax cuts and giveaways.”
Tax Justice UK aims to fill a “void in the debate around tax” in the UK. The November 22 budget should include steps toward “taxing the new economy” and resourcing and refocusing HM Revenue & Customs, it said in an October 25 release. The group was launched in May as a sister organisation to the Tax Justice Network but is independent of it, according to its website. Read more:
My news story for Tax Analysts, October 26 (paywall)
A FTSE 100 company has strongly denied engaging in tax avoidance, and has offered cautious support for steps toward the multilateral introduction of mandatory public country-by-country reporting of multinationals’ profits and taxes.
Responding to a report by Oxfam International, Reckitt Benckiser Group PLC (RB), a manufacturer of health, hygiene, and home products, said in a July 12 statement that it pays the correct amount of tax in each country where it does business: “As Oxfam recognises, RB’s tax policy is totally legal and the norm for the majority of global businesses. We comply with all our legal obligations and seek to do what is right by all the company’s stakeholders.” Continue reading FTSE 100 company defends tax policy and backs multilateral push for public country-by-country reporting
Business tax experts’ dominant role in consultations on measures to counter base erosion and profit shifting shaped a key debate on tax transparency, raising questions about inclusiveness and the formulation of policy, according to research presented to the Tax Justice Network.
Professionals played a central role in shaping the BEPS policy environment and process, according to a draft research paper presented by Rasmus Christensen, PhD fellow at Copenhagen Business School, at the Tax Justice Network’s annual conference in London July 5.
Christensen concluded that, operating within a technical policy environment “far removed” from high-level politics, “professionals seeking to make their mark on new standards for corporate tax transparency mobilised expertise and network capital, shaping what could be discussed, the criteria for accepted arguments, and who was listened to in the policy process, thus critically affecting the final policy outcomes.” His investigation is part of the Horizon 2020 program COFFERS, an EU-funded collaboration of universities and civil society organisations. Read more:
My news story for Tax Analysts, July 7 (paywall)
Rasmus Christensen’s draft paper: Professional Competition in Global Tax Reform: Transparency in Global Wealth Chains
The Brexit vote has presented U.K. lawmakers with a “once in a generation” opportunity to improve the tax system, a leading tax expert told participants at a debate held by the Women in Tax network in London two days before Donald Trump’s election victory added further uncertainty to the tax landscape.
Panellists shared their personal views on how a better tax system can be achieved. U.K. tax policy measures often have very vague goals, said Jill Rutter, program director for the Institute for Government think tank.
Read more: My news story for Tax Analysts, 10 November (paywall).
HM Revenue & Customs and politicians could do more to educate the public about tax and dispel “misleading impressions” about tax avoidance given by media reports, the Chartered Institute of Taxation has told the All Party Parliamentary Group on Responsible Tax.
The idea that there is a large “pot of gold” that could have reduced the need for austerity measures is a myth, the CIOT said, adding that “the concept that HMRC has failed to raid this non-existent pot is a fundamental misreading of reality.”
An APPG consultation was launched in September to consider HMRC’s ability to fight tax avoidance and evasion …
Read more: My news story for Tax Analysts, 26 October (paywall).
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.
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.