The House of Lords Economic Affairs Committee heard from representatives of HMRC and HM Treasury on 18 June, following its decision in March to conduct an inquiry into whether a new approach to taxing corporations is needed.
The House of Lords Economic Affairs Committee heard from representatives of HMRC and HM Treasury on 18 June, following its decision in March to conduct an inquiry into whether a new approach to taxing corporations is needed.
Edward Troup, HMRC tax assurance commissioner and second permanent secretary, told the committee: ‘We’re proposing to ask OECD to develop a standard template that multinationals can use to disclose certain high-level information to the tax authorities in the jurisdictions they operate.’
On the subject of tackling aggressive tax avoidance, Jim Harra, HMRC director general for business tax, told the committee, ‘We expect to consult on a range of measures designed to increase the stakes for promoters of high-risk tax avoidance schemes. Most mainstream advisors have moved away from these but a small “hard core” of tax advisors remain active. When an avoidance scheme fails, we name them publically, but the consultation will build on [measures we could take] including introducing penalties.’
When asked by the committee if any of the ‘big four’ accountancy firms were involved in promoting such schemes, Harra replied that while some ‘mainstream accountancy firms’ engaged in introducing high-risk tax avoidance schemes to their clients it was ‘mainly boutique firms that specialise in promoting [these schemes],’ adding: ‘In the past, the big four would have been involved and this would have to have been disclosed to HMRC. More recently, the level of disclosure required from the big four has gone down to virtually zero, and for the last few quarters, it has been zero.’
Troup added, ‘Although we are looking to penalise promoters of high-risk tax avoidance schemes, the whole point about avoidance is that it’s legal, and it’s difficult to penalise somebody who’s doing something legal.’
The House of Lords Economic Affairs Committee heard from representatives of HMRC and HM Treasury on 18 June, following its decision in March to conduct an inquiry into whether a new approach to taxing corporations is needed.
The House of Lords Economic Affairs Committee heard from representatives of HMRC and HM Treasury on 18 June, following its decision in March to conduct an inquiry into whether a new approach to taxing corporations is needed.
Edward Troup, HMRC tax assurance commissioner and second permanent secretary, told the committee: ‘We’re proposing to ask OECD to develop a standard template that multinationals can use to disclose certain high-level information to the tax authorities in the jurisdictions they operate.’
On the subject of tackling aggressive tax avoidance, Jim Harra, HMRC director general for business tax, told the committee, ‘We expect to consult on a range of measures designed to increase the stakes for promoters of high-risk tax avoidance schemes. Most mainstream advisors have moved away from these but a small “hard core” of tax advisors remain active. When an avoidance scheme fails, we name them publically, but the consultation will build on [measures we could take] including introducing penalties.’
When asked by the committee if any of the ‘big four’ accountancy firms were involved in promoting such schemes, Harra replied that while some ‘mainstream accountancy firms’ engaged in introducing high-risk tax avoidance schemes to their clients it was ‘mainly boutique firms that specialise in promoting [these schemes],’ adding: ‘In the past, the big four would have been involved and this would have to have been disclosed to HMRC. More recently, the level of disclosure required from the big four has gone down to virtually zero, and for the last few quarters, it has been zero.’
Troup added, ‘Although we are looking to penalise promoters of high-risk tax avoidance schemes, the whole point about avoidance is that it’s legal, and it’s difficult to penalise somebody who’s doing something legal.’
.jpg?sfvrsn=335a554c_0 "300 x 250 (MPU)")