http://www.mercerhole.co.uk/latest-blogs/latest-blogs en cathycorns@mercerhole.co.uk Copyright 2013 2013-05-17T10:16:57+00:00 http://www.mercerhole.co.uk/blog/article/uk-territories-agree-to-tax-transparency-measures http://www.mercerhole.co.uk/blog/article/uk-territories-agree-to-tax-transparency-measures British overseas territories, including Anguilla, Bermuda, the British Virgin Islands, Montserrat and the Turks and Caicos Islands, will provide information about bank accounts held in their jurisdictions.  Details will include names, addresses, dates of birth, account numbers, balances, and facts about payments made into the accounts.   2013-05-17T10:16:57+00:00 http://www.mercerhole.co.uk/blog/article/ec-to-monitor-tax-avoidance http://www.mercerhole.co.uk/blog/article/ec-to-monitor-tax-avoidance The EC has set up a platform for good tax governance, as part of the ongoing drive against evasion and avoidance. Interested parties, including national tax authorities, businesses, academics, and non-governmental organisations, will monitor member states’ progress in tackling aggressive tax planning and clamping down on tax havens.   The first meeting of the platform is provisionally planned for 10 June 2013.   2013-05-15T09:04:24+00:00 http://www.mercerhole.co.uk/blog/article/tax-avoidance-pubic-accounts-committee-report http://www.mercerhole.co.uk/blog/article/tax-avoidance-pubic-accounts-committee-report I read with some interest the PAC report on Tax avoidance: the role of large accountancy firms.  I am in total agreement with some of its conclusions and recommendations; although I have to say not all.  I give below, in no particular order, a summary of these: The UK tax system is too complicated and there is a need for radical progress on simplification - I think anyone involved in tax would agree with this. International tax rules need changing to reflect the way businesses now operate – again there should be little dispute. The Treasury need to issue a code of conduct for acceptable tax planning so there is clarity between this and aggressive tax avoidance - this sounds reasonable but in reality is likely, as with the GAAR guidance, to have large grey areas. It is not appropriate… 2013-05-10T10:51:10+00:00 http://www.mercerhole.co.uk/blog/article/hmrcs-gaar-guidance-continued http://www.mercerhole.co.uk/blog/article/hmrcs-gaar-guidance-continued One key issue from HMRC’s guidance is that taxpayers are no longer free to reduce their tax bills by any lawful means as previously held by the Courts. The GAAR ‘rejects the approach taken by the courts in a number of old cases to the effect that taxpayers are free to use their ingenuity to reduce their tax bills by any lawful means’.  Several examples given in the guidance support the principle that ‘abusive use’ of what would otherwise be lawful transaction will now not work, including: the use of structures (such as unauthorised unit trusts) ‘in an inappropriate way to produce a tax result that is clearly contrary to the intended consequences of the law’ (D9); and employers who enter into contrived and abusive arrangements to remunerate employees,… 2013-05-09T10:25:10+00:00 http://www.mercerhole.co.uk/blog/article/general-anti-abuse-rule-gaar http://www.mercerhole.co.uk/blog/article/general-anti-abuse-rule-gaar HMRC has published updated guidance on the GAAR.  This guidance now covers the purpose of the GAAR and provides examples that aim to cover the following broad categories: • Situations covered by law where Parliament has given taxpayers a choice, such as the main residence section – which are fine. • Long established practice – which is fine. • Situations where the law deliberately sets precise boundaries – which is generally acceptable. • Standard planning with some element of artificiality – which is a grey area. • Transactions demonstrably contrary to the spirit of the law – which will be caught. • Contrived or abnormal arrangements that produce a tax result not in any way consistent with legal effect and economic substance… 2013-05-07T09:16:37+00:00 http://www.mercerhole.co.uk/blog/article/uk-european-tax-deal http://www.mercerhole.co.uk/blog/article/uk-european-tax-deal The government has signed a tax international exchange agreement with France, Germany, Italy and Spain as a further attack on tax evaders. Under the agreement, banks in the five countries will have to reveal financial details of foreign clients to that person’s local tax authority.  It is an attempt to co-ordinate international action against tax evasion. 2013-04-29T10:39:41+00:00 http://www.mercerhole.co.uk/blog/article/misunderstanding-on-tax-avoidance http://www.mercerhole.co.uk/blog/article/misunderstanding-on-tax-avoidance Apparently, MPs on the Commons energy select committee criticised RWE npower after it emerged that the company’s tax liability had been eliminated by tax reliefs for substantial investment in infrastructure.  One MP claimed that observers would be ‘shocked’ to hear that the company believed it should not pay tax. The problem is that it is a well-established principle of UK corporation tax that depreciation charged in the accounts is disallowed for tax purposes and instead capital allowances are given for investment in plant and machinery. This does raise concerns over the quality of public debate about tax avoidance.  MPs do need to understand what is avoidance and what is not – by most definitions claiming capital allowances is not! 2013-04-26T10:33:36+00:00 http://www.mercerhole.co.uk/blog/article/creative-sector-tax-relief-ec-investigation http://www.mercerhole.co.uk/blog/article/creative-sector-tax-relief-ec-investigation The EC has opened an ‘in-depth investigation’ into the proposed tax relief included in the UK’s Finance Bill. The measure was announced, subject to state aid approval.  The relief is intended to provide an incentive to developers for products meeting certain cultural criteria. The EC has said that there is no obvious market failure in the sector and so doubts that State aid is necessary. Comments are invited within a month of the publication of the decision (in the EU Official Journal).  The opening of an investigation does not necessarily prejudge its outcome.  It gives interested parties the opportunity to comment. 2013-04-25T09:29:05+00:00 http://www.mercerhole.co.uk/blog/article/house-of-lords-review-of-company-taxation http://www.mercerhole.co.uk/blog/article/house-of-lords-review-of-company-taxation The House of Lords economic affairs committee has recently started an enquiry examining whether a new approach is needed to taxing corporations in the current global economy. The committee has said that the recent high profile issues involving multinational firms have raised the profile of the level of tax paid by large corporations.  Apparently it has been suggested that corporation tax has become a voluntary arrangement for such large entities. The inquiry will seek to address some of the key concerns that have fuelled the tax debate, and to assess the extent to which corporation tax has become ‘voluntary’.  It will consider the case for reform of the allocation of profits between countries, and whether any change should be based on existing treaty arrangement or whether… 2013-04-15T10:07:05+00:00 http://www.mercerhole.co.uk/blog/article/real-time-information-rti-paye-update http://www.mercerhole.co.uk/blog/article/real-time-information-rti-paye-update HMRC has (finally) admitted that the introduction of RTI may lead to more costs and problems for business than previously advised.  HMRC said it would monitor the possible burdens and consider whether any improvements are needed during the next few months as businesses get to grips with the new regulations.  HMRC has expressed gratitude to employers that had provided feedback about the impact of the new requirements.  HMRC acknowledges that its estimates on time and costs assume employers currently operate a standard approach to PAYE and that its figures may not take into account bespoke arrangements that employers have put in place to suit their particular organisations. However, HMRC will not be in a position to update their analysis of the impacts on business until summer… 2013-04-11T12:11:42+00:00