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News briefing, 18 January 2013

Jan 18, 2013, 09:47 AM
Authors : Taxation
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Post date : Jan 18, 2013, 09:47 AM

Our weekly comments on tax stories by the national press


HMRC used their powers of distraint – which allow the department to seize assets from businesses – almost twice as much in the year to April 2012 and they did in the previous 12 months.

The business payment support service is still available for those who wish to make a time-to-pay arrangement:  0845 302 1435. Taxpayers should be prepared for tough questioning by the Revenue.

Chancellor George Osborne has come under pressure to introduce measures to prevent big companies from deferring bonus payments to top staff until after the uppermost rate of tax is lowered in April. Calls for a change came after it was reported that investment bank Goldman Sachs planned to delay handing out its bonuses. The investment bank later backed down.
Independent, Times, Financial Times, Guardian & Telegraph

This is the Gerard Depardieu of tax-planning schemes: you move from a country with a high tax rate (France) to one with a lower tax rate (Belgium). In 2013/14, the past (well, 2012/13) will be another country for UK taxpayers, with a 50% top tax rate as opposed to 45%. Provided bonuses are not contractually payable, it is an obvious and straightforward piece of planning to delay them, just as many were advanced prior to the 50% rate being introduced. We seem to be reaching the point at which tax is imposed by public opinion rather than law.

Multinational firms would no longer to be able to hide how much corporation tax they pay in the UK under a Labour government, according to the party’s leader, Ed Miliband.
Guardian, Independent, Times & Financial Times

Companies are beholden to their shareholders to be profitable, and are taking advantage of existing in a global economy. It is difficult to see how publicising the amount of corporation tax they pay in the UK would make a difference their global strategies. A better approach would be for the OECD to urgently revisit the definition of a permanent establishment and redefine it for the digital age.

Private companies providing NHS services could be exempt from paying corporation tax on their profits, under proposals being considered by a government-commissioned review of competition in the health service.

The review has yet to report to the government, so the Guardian report is merely speculation.


Tax agents are facing fines of up to £50,000 for "dishonest conduct" as HMRC try to tighten controls over tax advisers.
Telegraph [not online]

Readers will already be aware of this news: the measure has been in the pipeline for some time. While the top penalty is £50,000, the range starts at a not-so-newsworthy £500 and is subject to appeal.

Taxpayers’ personal data, including records of websites they have visited, is being viewed by HMRC on an increasingly frequent basis.

Many of us will be unhappy at encroachment by the government on our private lives, regardless of which department is involved. It should be remembered that the Revenue has to deal with offences such as smuggling, investigations of which covert surveillance is obviously more likely.

HMRC paid £260m in rent last year to an offshore property group based in Guernsey and Bermuda, under a scheme that has been described by MPs as tax avoidance.

This is not a recent development; it is part of the STEPS (strategic transfer of the estate to the private sector) PFI project that began in 1999: the Inland Revenue as was decided to sell and leaseback their properties. The Treasury Committee discussed the project in 2003, when the Revenue came under fire for its use of a tax avoidance scheme.

Income tax

Plans for generous tax breaks to help working parents to pay for childcare have been abandoned because the wealthy families would have benefited the most.

The government is considering making the proposed allowance more targeted – but it will still not take into account the burden imposed on an individual taxpayer of operating PAYE for a nanny, particularly after the real-time information system has come in to effect in April.


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