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
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