Our weekly comments on tax stories by the national press

Avoidance & evasion

The chancellor, George Osborne, is finalising measures to clamp down on two of the world’s most notorious tax havens: the British Virgin Islands and the Cayman Islands.
Times; Guardian

It is ironic, to say the least, that the government is cracking down on tax avoidance and evasion while some of the world’s best-known tax havens are British territories, albeit ones that expect to have a significant amount of self-governance. In fact, the UK itself is an attractive haven for non-UK domiciles, which has changed the composition of the Sunday Times Rich List.

UK taxpayers hiding money in the Isle of Man, Jersey or Guernsey have three years to disclose their assets to HMRC or face penalties.
Financial Times; Telegraph

Those who are potentially eligible to make use of the new disclosure initiatives should bear in mind that HMRC may take criminal proceedings against those continue to evade tax after the schemes have closed. For this reason, many specialists in investigations say the Liechtenstein disclosure facility may be better.

Business

The government has referred 100 companies for investigation by the taxman in response to suspicions they may be breaking the law through their use of unpaid interns.
Guardian

The possibility that young people can gain practical work experience by spending time in a business environment is worth pursuing – but a line can be crossed. For example, the BBC recently reported that Reading Football Club was seeking to appoint an unpaid full-time performance analyst to work for a year. The campaign group Intern Aware is concerned that such positions will be the preserve of the wealthy. There is also the question of whether or not there is an infringement of the national minimum wage rules.

George Osborne’s plan to give UK video games-makers tax relief has been thrown into confusion after the European Commission opened an investigation into the measure.
Financial Times

Margaret Thatcher said, “You can’t buck the market” – and there will be many small businesses that understand the fact but still wonder – when they learn of special tax measures for certain sectors – why they are not eligible for state aid in the form of a special 25% relief. The EU may agree that there must first be a market failure that needs to be bucked before such unique treatment can be countenanced, although the fact that other member states also have subsidies might mean the UK’s scheme does eventually get sanctioned.

Residence & domicile

Lawyers are urging non-domiciled people living in the UK to check their tax position or risk hefty penalties from HMRC, following recent changes to legislation.
Financial Times

Given the substantial tax charges that can be involved if mistakes are made when remitting funds to the UK, professional advice should be taken to ensure compliance with new rules contained in Finance Bill 2013.

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