Devereux sets tax research agenda

The value of deals such as the Ferrovial bid for BAA and whether or not
corporation tax is simply passed on in higher wage bills are two issues set to
be addressed by the new Oxford Business Centre for Tax Research.

The centre announced this week that Michael Devereux, currently professor of
economics at Warwick, is to be the first director of the centre, funded by The
Hundred Group of Finance Directors.

The appointment had been hotly awaited as a sign of the way the centre would
sway, with the tax debate generally deeply polarised between academic criticism
of tax avoidance and private sector defences of corporate behaviour.

Devereux told Accountancy Age in an interview this week that the
value of foreign direct investment, such as that seen in the BAA deal, and tax
advantages accruing to foreign investors would be one area of research.
Avoidance would also be discussed: ‘From an economic perspective you are always
going to get avoidance,’ Devereux said.

He added that the value of spend-to-save initiatives would be discussed,
citing the idea that such moves might be more effective on transfer pricing
issues than in a pure domestic setting.

Domestically, the investment would transfer assets from one UK body to
another. Internationally, the investment might recover tax that would otherwise
be lost to the UK.