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News briefing, 31 May 2013
Our weekly comments on tax stories by the national press
Avoidance
More than 400 wealthy individuals who took part in the Cup Trust, a complex avoidance scheme involving shares in a British Virgin Islands company, face a £190m tax bill after a legal victory by HMRC.
Financial Times; Times
This third success for the Revenue against avoidance scheme promoter NT Tax Advisers demonstrates the department’s tough stand against what it perceives to be abusive arrangements.
Controversy over tax avoidance by multinational companies has been fuelled by the appointment of ex-HMRC boss Dave Hartnett to a new position with accountancy giant Deloitte.
Guardian; Independent
It is not a surprising move. Countless former Revenue employees have moved to the private sector over the decades, including many top experts.
Britain's manufacturers have warned that the debate over corporate tax avoidance could undermine the efforts to attract investment to the UK.
Financial Times
The UK’s relatively low rate of corporation tax and measures such as the patent box are designed to attract foreign investment into the country.
Business
Gas and electricity companies have attempted to exploit tax laws and “unfairly” claim up to £900m in tax relief, according to the chancellor, George Osborne.
Telegraph
In essence, utility companies expect businesses to contribute toward the cost of making changes to power supply lines. Current legislation allows energy providers to claim relief for the businesses’ costs. This is to be changed so that contributing firms earn the relief.
The UK’s biggest companies should lose the right to confidentiality in their tax affairs, according to the chair of the parliamentary Public Accounts Committee (PAC), Margaret Hodge MP.
Independent
Hodge was pipped by the EC, which last week intimated it would like to bring forward legislation to force large companies operating in the EU to publicise details of their tax affairs. The PAC chair’s call misses the point that the government will have to amend the law if it wants large companies to pay more UK tax.
Online retailers should be taxed more to allow high street shops to better compete with their digital rivals, according to the heads of leading store chains.
Sun
This is an understandable demand, but it is difficult to see what more the government could do to tax businesses that operate purely online.
Investigations
HMRC's scrutiny of cricket clubs’ tax affairs has extended down to the minor leagues, leading to accusations of aggressive behaviour by the department.
Telegraph
Local sports clubs may need to approach a friendly accountant for advice, to ensure they are adhering to the tax rules that apply irrespective of the size of the organisation.
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