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Growing burden
Tax directors across Europe expect their compliance and regulatory burden to increase, as the cost of compliance rises and their exposure to other countries' tax rules accelerates, according to Ernst & Young's 2005 European survey of 150 tax and finance executives in large multinationals across eight EU countries, i.e. the UK, Belgium, France, Germany, Italy, the Netherlands, Poland and Switzerland. Over 60% of respondents thought that meeting tax authority deadlines, keeping an overview of their tax position in each country of operation and setting and documenting internal controls were assuming top importance.
Only 4% wanted to improve the focus on planning. This compares with the 2002 survey when respondents said that they spent 44% of their time on planning, and would have liked to increase that time.
UK tax directors say they would like to recruit more people, including those without traditional tax skills, to deal with compliance. Elsewhere in Europe, respondents said that they wanted more control and visibility of the processes which they regarded as key, in particular worldwide tax filing and transfer pricing.
Ian Sadler, leader of Ernst & Young's global tax operations business in Europe, said that the regulatory environment had grown over the last three years, citing Sarbanes-Oxley, international financial reporting standards and recent European Court of Justice decisions as examples. He said that perhaps the time had come for the tax department to be rebranded as a 'contributor to corporate value on the very back of this growing compliance burden'.
Ernst & Young European survey of 150 tax and finance executives.
Band Aid
The Economic Secretary to the Treasury, Ivan Lewis, said that over £2 million has been refunded to the Band Aid Trust, equivalent to the VAT paid on more than one million purchases of the Christmas Band Aid 20 record and 300,000 purchases of the DVD of the 1985 Live Aid concert.
HM Treasury press release 54/05 dated 31 May 2005.
Bill of rights
It is time for taxpayers to have a bill of rights, says PricewaterhouseCoopers in its response to the consultation document, 'HM Revenue & Customs and the taxpayer: Modernising powers, deterrents and safeguards'. John Whiting says that such a document would 'set out the key rights and reciprocal obligations of taxpayers'. The firm's other proposals include:
- the establishment of a committee along the lines of the Keith committee to undertake a thoroughgoing review of powers;
- inclusion of the need to ensure powers and procedures minimise burdens on taxpayers as one of the stated principles which should support taxpayers' relationships with HMRC;
- clear and straightforward dispute resolution procedures;
- the introduction of a taxpayers' bill of rights.
PricewaterhouseCoopers believes that this review should inculcate a sense of balance between the authorities and taxpayers. It also proposes that HMRC should, when exercising their powers, aim to minimise burdens on taxpayers, and businesses in particular, as far as possible. In other words, PricewaterhouseCoopers believes there should be greater acknowledgement of the fact that although all taxpayers have their duty to comply, and assist the tax authorities, the tax authorities in turn ought to recognise their duty not to get in the way of taxpayers' day-to-day activities so far as possible.
HMRC's authority must also be balanced and offset with safeguards for the taxpayer. There ought to be clear and straightforward dispute resolution procedures built into the system. This should encompass giving taxpayers a general right of appeal and the clear possibility of costs being awarded against the authorities for unfair or unreasonable use of their powers.
PricewaterhouseCoopers press release dated 15 June 2006.
Congratulations!
A pharmacist, Ashwin Tanna FRPharmS, has won the CIOT's 'If I were Chancellor' competition. He argued for a change in stamp duty whereby the duty increases smoothly according to the value of the property, i.e. a step basis, rather than a slab basis. Mr Tanna argued that this would encourage 'first-time buyers to take the plunge'.
For his prize, Mr Tanna received two complimentary tickets to see Pericles at the Globe Theatre and two magnums of champagne.
CIOT press release dated 8 June 2005.
