Mercer & Hole’s Business blog -

The Chancellor has just announced that from 1 April 2015 the UK will have a single rate of corporation tax of 20% abolishing the differential between different sized companies and giving the UK an attractive lower base rate for business. ...

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The UK and the Isle of Man governments have agreed an automatic information exchange procedure as well as a disclosure facility for UK taxpayers. The automatic exchange agreement provides for a wide range of financial information on UK taxpayers with accounts in the Isle of Man to be automatically reported to HMRC every year. The new Isle of Man disclosure facility encourages taxpayers to come forward rather than wait and face higher penalties if found out. However, the new facility is much less attractive than others in that it does not offer immunity from criminal prosecution.  It excludes a...

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Larger companies are not paying enough tax according to the Organisation for Economic Cooperation and Development (OECD).  The OECD said that rules designed to protect companies from paying tax twice were “too often” being used to “allow them to pay no taxes at all”. The strategies used are legal, but are perceived as eroding the tax base of many countries. The OECD’s report states that many double taxation agreements do not properly reflect the way that larger companies now do business.  The agreements fail properly to recognise cross-border integration, values of intellectual...

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A recent tax case has worrying implications for the tax deductibility of travel costs for self-employed individuals. The case concerned a geriatrician who had a dedicated office at his home which he needed for his business – this was accepted by the Tribunal. However, the doctor also worked as an employee for an NHS Trust, and additionally held out-patient sessions at two private hospitals on a self-employed basis.  The doctor had his home office set up as his business address where he received correspondence, accessed emails and at that location prepared treatment plans for his private patients. The doctor...

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The Treasury is giving a one-off exemption from UK tax for athletes completing at the Diamond League event at the Olympic Stadium on 27 July this year. Usain Bolt, who is a fan favourite, has previously been quite vocal of his dislike of UK tax laws that effectively mean he has to pay to race in the UK and indeed he was refusing to compete here. Whilst I am personally thrilled at the opportunity to see Bolt live in the UK, the piecemeal application of exemptions (why not the same treatment for tennis players, for example?) seems a little odd. ...

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Despite recent media hype it appears that the rich are not avoiding tax on a massive scale.  According to the data recently published by HMRC, the wealthiest individuals in the UK will be paying more than 60% of the country’s income tax rate this year, despite representing only 14% of taxpayers. ...

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I took some time over the weekend to read the PAC’s report on “Tax avoidance: tackling marketed avoidance schemes”. The report is a tad biased and seems to blame HMRC for the current situation. In essence the committee seems to believe that tax avoidance, which they regard as using tax law to gain an advantage not intended by Parliament, should (and could) be stopped.  In the committee’s opinion there is a “proliferation of contrived schemes which exploit loopholes in legislation and abuse available tax relief schemes”, that “far too much...

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There is a (very brief) consultation on the proposed new procurement policy which will come into force on 1 April 2013.  This can be found at HMRC Consultation document Tax and Procurement. Broadly, the new policy on procurement is that, from 1 April 2013, potential suppliers to central government will have to self-certify their recent tax compliance history as part of the selection stage of procurements with a value of £2 million or more. Additionally, Contracting Authorities will ensure that the contractual documentation enables them to terminate a contract, at their discretion, if a supplier has an ‘occasion of non-compliance’. ...

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After all of the furore on tax avoidance in recent weeks, and the calls from the Public Accounts Committee to name and shame tax evaders, I did look with interest at the list of current tax defaulters published by HMRC last week. I know this sounds shallow but I was expecting something a bit more exciting  - some international tax scheme that had been foiled saving millions - whereas what I got was hairdressers and builders with tax bills of less than £30,000.  I know it all adds up but…. I assume the view from the government...

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The UK-Swiss tax agreement (which came into force on 1 January 2013) has paid to HMRC £342m as the first instalment of a levy on the accounts of UK taxpayers in Switzerland to cover arrears of tax that should have been paid to the UK. Current and future tax liabilities will be covered by a new withholding tax (of up to 48%) on income.  Under the agreement, people with taxable assets in Switzerland have a choice of authorising their financial institution to disclose the details to HMRC or have the levy and withholding tax applied. ...

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