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Tax avoidance – Public 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 for secondees who assist in developing tax law to advise on this when they go back to their firms.  Why not?
  • Greater transparency would encourage companies to pay a “fair share” of tax in the countries in which they operate.  The problem is tax is due under the laws of each country – which are different.
  • HMRC is not able to defend the public interest effectively.  I agree the cutbacks in HMRC’s staff has had an impact on service but I am not sure I agree that HMRC cannot currently do its work effectively.

 

 

Date: 10th May, 2013
Author: Cathy Corns

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