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alexw

Government Responds To The Tax Protests

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http://www.guardian.co.uk/business/2010/dec/06/treasury-review-uk-tax-avoidance-schemes


The Treasury announced a potentially far-reaching change to UK rules on tax avoidance today after a weekend of protests over corporate tax behaviour, which saw campaigners shut down Topshop's Oxford Street store in central London.

As part of a crackdown on tax loopholes, the Treasury said it was launching a review into introducing a general anti-avoidance rule (GAAR) – a long-running aim of tax campaigners.

Under Gordon Brown, the UK introduced a tax disclosure regime whereby those using avoidance schemes had to disclose them in their tax returns. A GAAR would go a step further, deploying an as-yet-unspecified mechanism, meaning corporations would need clearance from HM Revenue & Customs on their tax plans before implementing them.

A spokesman for the UK Uncut campaign, which led the protests at the weekend, said it was "great to see the process works so quickly" but added that loopholes the Treasury said it had closed today would save "paltry" amounts of tax compared with the amount being avoided every year.

However, the Treasury claimed that the schemes HM Revenue & Customs has now shut down will protect £5bn in revenues and raise an additional £2bn over the lifetime of this parliament.

It comes after the Guardian revealed at the weekend that Kraft, the US multinational that bought Cadbury earlier this year, plans to shift parts of the chocolate business to Switzerland to avoid tax.

The government said in the summer that a general anti-avoidance rule was an option, but the announcement today gives the review a definite scope.

A corporate tax barrister, Graham Aaronson, will lead the review. He has acted in some of the most high-profile corporate tax cases of recent years, representing companies such as Marks & Spencer, Barclays and Mars.

Ministers are understood to be open-minded about introducing a GAAR. Critics warn it might create uncertainty for business, in that a clearance system would rely on one individual's opinion rather than the views of judges considering tax law, and that it might be expensive for HMRC to spend its time clearing tax planning.

Bill Dodwell, a corporate tax adviser at accountancy firm Deloitte, said: "We do not think a clearance system is the answer. It would come down to the individual's judgment, and it will add to business uncertainty."

The UK Uncut protests have so far focused on Vodafone and on Sir Philip Green's Arcadia group.

Vodafone settled a long-running tax case with HM Revenue & Customs (HMRC) earlier this year over its purchase of the German mobile phone company Mannesmann in 2000, paying £1.2bn to the UK government. The case revolved around tax that HMRC said was due on income earned in a Luxembourg subsidiary used to finance the purchase of the German company. Critics say HMRC caved in over a potential £6bn tax liability, though Vodafone has dismissed that figure as an "urban myth".

The criticisms of Green stem from the £1.2bn dividend paid by Arcadia to his Monaco-resident wife. Critics say that was in reality his income and should have been taxed as his income.

The Public and Commercial Services Union, which represents many HMRC staff, said: "If the minister was, as he claims, 'fully committed to tackling tax avoidance', he wouldn't be talking about just another £2bn over four years, he would be targeting 10 times that amount every year."








Most important bit seems to be GAAR Edited by alexw

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meaning corporations would need clearance from HM Revenue & Customs on their tax plans before implementing them.

Why do I instantly start to think that this would cost more than the amount of extra tax it ever collected? Come to think of it, why do I think that a 'review' would ever lead to anything concrete?

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I wish them the best of luck.. that's going to be one slippery eel to grasp if they do it properly.

At least they appear to be making an effort (and taking a big political risk).. it's going to be a fine balance between evening up the system and scaring off business.

Edited by libspero

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If you do one or more of these three

Live here , work here , make a profit here .

Pay tax like everyone else here , let's not forget WE ARE ALL IN THIS TOGETHER!!

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A corporate tax barrister, Graham Aaronson, will lead the review. He has acted in some of the most high-profile corporate tax cases of recent years, representing companies such as Marks & Spencer, Barclays and Mars.

"Man who makes his money from advising on tax avoidance schemes for corporations, to lead review on whether tax avoidance schemes for corporations should be allowed".

I wonder what the outcome will be?

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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