THE CHANCELLOR is set to announce plans to clampdown on tax dodgers amid growing controversy over the tax affairs of multinational companies operating in the UK.
Key to George Osborne's proposals will be an additional £77m a year for HM Revenue & Customs to tackle artificial tax schemes among multinationals, the wealthy and offshore evasion – particularly accelerating work on transfer pricing arrangements, which allow companies to shift profits outside of the UK to lower tax jurisdictions.
He estimates the measure will eventually raise £2bn per year, while a separate deal with Switzerland could bring in more than £5bn of previously uncollected taxes from Swiss bank accounts over the next six years. The total raised by the initiatives would be in the region of £10bn, reports the Financial Times.
The news comes after Starbucks announced it was in talks with the government over its tax affairs. The coffee house has been at the centre of controversy around multinationals' tax affairs after it was revealed it had only posted profits once since it arrived in the UK in 1998, paying £8.6m in corporation tax.
Labour MP Margaret Hodge branded evidence given to the Public Accounts Committee by Starbucks and representatives from Google and Amazon as "unconvincing, and in some cases evasive" in its latest HM Revenue & Customs annual report and accounts.
The report was based on evidence given to the committee by HMRC throughout the year and Amazon, Google and Starbucks. It analysed the department's performance and criticised it for "not taking sufficiently aggressive action to assess and collect the appropriate amount of corporation tax from these multinationals".
For once I agree with the Indian's, Portugese, Irish...
To get fee income from India a 20% WHT rate is applied unless you are regsitered in India in which case its 10%.
In Portugal the amount is 15% but this can be avoided if you supply a signed form to the Portugese company you are dealing with that has been signed by HMRC in triplicate.
My solution - and a very simple one - is to apply a 10 or 15% witholding tax on all royalties, management charges that are paid outside the UK.
The recipient company is then issued a tax certificate in which it can calim DTR in the country for whcih it is actually registered, so in effect they are no worse off - but at least we retain some tax revenue in the UK for a change !
Posted by: ashley smith, 04 Dec 2012 | 17:56
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