The most recent articles from Accountancy Age

PwC Legal recruits Freshfields' tax litigation expert

Kevin Reed — 2008-10-10T09:38:00.000Z

Kevin Reed, Accountancy Age, Friday 10 October 2008 at 09:38:00

PwC Legal recruits Freshfields' tax expert Ebrahim Ali to handle clients' tax litigation

Ebrahim Ali has joined PricewaterhouseCoopers Legal's tax ligitation team.

The solicitor will be responsible for advising and representing the firm's clients in MHRC investigation and tax litigation.

He joins from Freshfields Bruckhaus Deringer’s tax department where he specialised in dispute resolution.

Prior to that he was head of tax litigation at the HM Revenue and Customs Solicitor’s Office where he had overall responsibility for advising on tax investigation cases, major transfer pricing disputes and EU and other tax litigation.

'The growth of the tax litigation team is ongoing, in line with the growth in client work,' Agnes Quashie, partner, PricewaterhouseCoopers Legal.

Taxman plans new offshore amnesty

Nick Huber — 2008-10-08T14:43:00.000Z

Nick Huber, Accountancy Age, Wednesday 8 October 2008 at 14:43:00

HM Revenue & Customs is to press ahead with a second amnesty, it told senior tax advisers this week

HM Revenue & Customs is planning to offer British taxpayers a second chance to come clean about their offshore bank accounts as part of its crackdown on tax evasion.

The government department, which is still seeking a first criminal prosecution over offshore tax evasion, told tax experts and accountancy institutes of its plans for a second tax amnesty at a meeting earlier this week.

HMRC had earlier suggested, then appeared to backtrack, on another amnesty, the latest signs suggesting it is indeed planning a new disclosure scheme.

Last year HMRC raised £400m after British taxpayers with money in offshore accounts run by high street banks were granted leniency in return for voluntary disclosure.

A second offshore tax amnesty could help HMRC clear the backlog of cases in its offshore banking investigation covering tens of thousands of investors with bank accounts in offshore tax centres ranging from Lichtenstein to Bermuda.

Last month HMRC said it had opened enquiries into 12,000 accounts and would proceed with a further 79,000 over the next two years.

One tax partner familiar with the offshore crackdown said the accountancy profession would welcome a second tax amnesty but called for the HMRC to publicise it more heavily than the last one.

'You need to do one big amnesty and deal with the issue once and for all,' he said.

HMRC is under pressure to show more progress in its offshore tax investigation amid concerns among some accountants that the taxman is struggling with poor quality information and a shortage of experienced investigators. HMRC has said it has enough staff working on the investigation and always knew it was going to be large task.

An HMRC spokeswoman confirmed a second offshore tax amnesty was likely but said it still had to agree the details with accountants and banks.

Further Reading:

Second amnesty as taxman reaps £500m in offshore cash

Online debate rages over Palin's tax returns

Kevin Reed — 2008-10-07T10:20:00.000Z

Kevin Reed, Accountancy Age, Tuesday 7 October 2008 at 10:20:00

Palin's tax returns spark online debate over whether she has underpaid tax

US tax blogs have pored over Sarah Palin's tax returns and decided: they're wrong.

The tax returns of vice-presidential candidate Sarah Palin have sparked a frenzy of debate among tax academics, lawyers and bloggers over whether she and her husband still owe tax due to alleged errors.

Jack Bogdanski of Lewis & Clark and Bryan Camp of Texas Tech raised issues over her returns.

'The children's travel payments are clearly taxable income,' said Bogdanski on his blog.

The debate was sparked by tax lawyer Roger M Olsen backing aspects of her tax return.

TV stars and football manager targeted in offshore tax probe

AccountancyAge.com — 2008-10-06T09:44:00.000Z

AccountancyAge.com, Accountancy Age, Monday 6 October 2008 at 09:44:00

HMRC crackdown includes four celebrities, paper says

Four celebrities are being targeted as part of HM Revenue & Customs' crackdown on offshore accounts, it has emerged.

The four – a male actor, a male TV presenter, a TV actress and a leading football manager – are all said to be household names.

They are among the 80,000-plus wealthy investors who are suspected of using offshore bank accounts to avoid paying UK tax. The inquiry has centred on bank accounts in tax havens including including Liechtenstein and Bermuda.

A Revenue source told the Sunday Mirror: 'It has recently emerged there are some high-profile figures that are coming under greater scrutiny as part of the wider tax evasion investigation.

'But the Revenue is keen to track down every single tax dodger whether they are entertainers, bankers or lawyers. The important thing is to build enough evidence to bring a successful civil or criminal prosecution.'

HMRC's crackdown on offshore accounts is facing mounting as the timetable drags on attempts to hit tax evaders hard.

The government department is still was seeking a first prosecution and is due to meet with representatives from the accountancy profession this month to seek advice on its probe.

In August Accountancy Age first revealed that HMRC's offshore investigation covered some household names. At the time, Dave Hartnett, acting chief executive of HMRC, said he hoped to begin its first offshore prosecution of an investor ‘within months'.

Further Reading:

Read the Mirror story

Buy-to-let investors warned on tax crackdown

AccountancyAge.com — 2008-10-06T09:38:00.000Z

AccountancyAge.com, Accountancy Age, Monday 6 October 2008 at 09:38:00

Taxman to match data from other agencies with its own return records

Buy-to-let investors have been warned to keep their information up-to-date, as the government looks to enforce a tax clampdown on the sector.

HM Revenue & Customs is to 'data match' information from local authorities, the Stamp office and letting agents on rental income and property sale revenues with its own tax filing records, The Scotsman reports.

Andrew Addie of Grant Thornton Scotland said that HMRC is taking the buy-to-let market seriously.

'It's crucial to notify HMRC of any new source of taxable income, including rental income, as soon as possible,' he said.

Further Reading:

Read The Scotsman's report

Moira Stuart is the fresh new face of HMRC tax ads

Penny Sukhraj — 2008-09-25T10:24:00.000Z

Penny Sukhraj, Accountancy Age, Thursday 25 September 2008 at 10:24:00

Stuart takes over from BBC presenter Adam Hart-Davis, who admitted earlier this year that he expected to be replaced by a 'new and more beautiful face'

Former BBC newsreader Moira Stuart will next week address television audiences as the fresh new face of HM Revenue and Customs, as part of its self-assessment advertising campaign.

Stuart takes over from BBC presenter Adam Hart-Davis, who admitted earlier this year that he expected to be replaced by a 'new and more beautiful face'.

Stuart will be encouraging taxpayers to file their returns online and on time.

HMRC head of marketing Simon Vessey said it was great news that Stuart would front the campaign.

'She's a household name that people naturally tune in to and trust,' said HMRC head of marketing Simon Vessey.

Hart-Davis' line during his stint was that 'tax doesn't have to be taxing' but he told Radio Five Live in an interview earlier this year that he believed the system was too complex, especially for the self-employed, BBC.com reported.

He further described VAT as 'absurdly complicated' but said he was supportive of the tax system and considered fronting the campaign 'huge fun'.

The new campaign will include billboards, posters, in the press and adverts online focusing on the new deadlines of 31 October for paper tax returns and 31 January for online tax returns.

Further reading:

Taxman embarks on ad blitz

Germany launches tax evasion investigation into 966 Leichtenstein bank account holders

Paul Grant — 2008-09-25T09:43:00.000Z

Paul Grant, Accountancy Age, Thursday 25 September 2008 at 09:43:00

Prosecutors in Germany use bank details obtained after a trial to launch Leichtenstein tax evasion probes

German prosecutors have launched tax-evasion investigations into 966 individuals discovered to have accounts in Leichtenstein.

The probes are based on information from the Liechtensteinische Landesbank that fell into the German tax body’s lap following a trial in Rostock and which the bank claims is stolen, according to the Wall Street Journal.

It is understood that the investigations cover around €1bn in deposits and interest.

Izza talks tax with Labour

Our Parliamentary Correspondent — 2008-09-24T14:42:00.000Z

Our Parliamentary Correspondent, Accountancy Age, Wednesday 24 September 2008 at 14:42:00

ICAEW chief executive Michael Izza works with government to find ways to ease tax burden of low paid

ICAEW leaders have met Labour policymakers over a private dinner at the party’s conference to discuss the taxation of the low paid.

At an event entitled 'Building fairness into the tax system', chief executive Michael Izza urged the Treasury to accept technical accountancy expertise from the institute to help devise solutions to the high marginal tax rates suffered by the low paid.

Treasury secretary Yvette Cooper was also at the meeting, alongside institute technical committee chairman Francesca Lagerberg and commons Treasury committee chairman John McFall.

The high marginal deductions are associated with the withdrawal of tax credits at the same time as national insurance contributions are required and individuals start paying income tax at the basic rate.

At other meetings Izza urged delegates to involve accountants in ensuring developing countries have trustworthy financial institutions able to attract investment and effectively handle aid. He also underlined moves to open accountancy recruitment to those who left education with inadequate qualifications.

Offshore tax probe hits the buffers

Nick Huber — 2008-09-24T14:34:00.000Z

Nick Huber, Accountancy Age, Wednesday 24 September 2008 at 14:34:00

HMRC crackdown on offshore accounts hits problems with information quality and inexperienced investigators

The taxman’s high-profile crackdown on offshore accounts is facing mounting problems this week, as the timetable drags on attempts to hit tax evaders hard.

Advisers said HM Revenue & Customs was seeking a first prosecution, while it has set up meetings with the profession, possibly as a prelude to a fresh tax amnesty.

HMRC is due to meet the main institutes and tax experts next month as it faces growing pressure to show a breakthrough in its investigations.

It is keen to begin high-profile criminal prosecutions of taxpayers to act as a deterrent and show progress, but none have been forthcoming.

Stephen Camm, head of tax investigations at PricewaterhouseCoopers, said: ‘The whispers are that HMRC is desperately hunting a criminal prosecution. We are all waiting with baited breath.

Over the weekend it emerged that HMRC’s investigation now covers up to 80,000 investors suspected of using offshore bank accounts to avoid paying UK tax.

It is understood that accounting firms extracted the information from HMRC, which revealed the figure after a request under the Freedom of Information Act.

An HMRC spokesman said the meeting with the institutes and banks was ‘part of ongoing discussions’ about advancing the offshore investigation.

In August Dave Hartnett, then acting chairman of HMRC, told Accountancy Age it hoped to begin its first offshore prosecution of an investor ‘within months’.

‘On a score of one to ten I would probably give the investigation six to six and a half,’ said Bob Brown, global leader for tax and investigations for Ernst & Young.

‘The quality of information [on offshore accounts] is not as good as they thought and they lack enough experienced investigators to run with this,’ he said.

An HMRC spokesman said: ‘We have opened enquiries into nearly 12,000 offshore accounts and will proceed with a further 79,000 over the next two years.’

‘We always knew the scale of the offshore disclosure project would be significant and we are fully resourced to carry it through.’

Government could raise taxes to cover £90bn borrowing rise

Paul Grant — 2008-09-22T09:40:00.000Z

Paul Grant, Accountancy Age, Monday 22 September 2008 at 09:40:00

Credit crisis will cause huge rise in borrowing and possible income tax hike, experts predict

The state of the government’s finances are so perilous that it may have to borrow £90bn next year and raise taxes.

Analysis by the Centre for Economics and Business Research predicts that borrowing this year will be $63bn, well above the £43bn forecast by chancellor Alistair Darling, rising to £90bn in 2009-10. To cover the shortfall, income tax would have to rise by 5p in the pound.

Other research by Capital Economics predicts that Britain’s budget deficit, already the largest in the developed world, will rise to £100bn by 2010-11, according to The Telegraph.

French government reverses 'picnic tax' plan

Kevin Reed — 2008-09-19T09:29:00.000Z

Kevin Reed, Accountancy Age, Friday 19 September 2008 at 09:29:00

The French are once again safe to pack their disposable cutlery into their hampers after the government reverses plan to introduce picnic tax plan.

Plans for a 'picnic tax' in France have been dropped after fierce opposition.

The French government had planned to introduce a tax on disposable plates, cups and cutlery to encourage people to use reusable products.

But prime minister Francois Fillon reversed the decision, saying that tax levies on the rich should be proposed rather than people on a day out, reports Reuters.

Taxpayers will stump up for Northern Rock add-ons

David Jetuah — 2008-09-18T00:29:00.000Z

David Jetuah , Accountancy Age, Thursday 18 September 2008 at 00:29:00

Taxpayers to pay for any BDO 'top-up fees' resulting from Northern Rock valuation

Taxpayers will have to foot the bill for any ‘top-up fees’ that BDO Stoy Hayward submits to the government if disgruntled shareholders take legal action against its valuation of Northern Rock.

The firm recently won a £4.5m deal to put a price tag on the Rock with the government’s £25bn bail-out package stripped out, but any legal fallout is not included in the figure.

A Treasury spokesman said the £4.5m was a fixed fee but there was ‘flexibility. Anything extra for the handling of appeals would be paid for later,’ he said.

The Treasury has said that value for money was one of the key appointment criteria in choosing BDO, but the taxpayer will still have to advance money for any additional activity, before Northern Rock eventually picks up the tab.

‘Any costs would be met by Northern Rock,’ the spokesman added, indicating that ultimately the costs of the BDO investigation would transfer to the company.

Shareholders have already voiced their displeasure at the valuation set-up, with the UK Shareholders’ Association saying it believes the terms of reference have been constructed so as to reach a zero value.

BDO confirmed last week that its valuations partner Andrew Caldwell would handle the valuation.

The firm’s involvement with the Rock could stretch on for some time.

‘At this very early stage in the process, it is impossible to determine the likely timescale for this work or the amount of compensation which will be made available to shareholders,’ he said.

‘It is the firm’s intention to conduct a fair, open and transparent valuation of the compensation scheme for the benefit of all the shareholders.’

Lib Dems to claim tax cut mantle

AccountancyAge.com — 2008-09-15T10:44:00.000Z

AccountancyAge.com, Accountancy Age, Monday 15 September 2008 at 10:44:00

The Liberal Democrat party will attempt to reposition itself as a tax-cutting party today at the start of its annual conference.

The Liberal Democrat party will attempt to reposition itself as a tax-cutting party today at the start of its annual conference.

Economics spokesman Vince Cable will tell party activists that they have a 'duty' to present themselves as a tax-cutting party, in a policy shift that is expected to meet resistance from many party members.

Lib Dem leader, Nick Clegg, wants to reduce tax bills for bills for low and medium earners by the equivalent of 4p off income tax. He also wants to offer further tax cuts by using money saved from axing £20 billion of Whitehall spending.

'I keep reading in the press that some of our activists don't like the language of tax cutting; they think it is 'right wing'," Cable will say in a keynote speech ahead of the tax debate,' according to the Press Association news agency.

'But I don't see what is 'right wing' about wanting to cut the taxes of millions of people who earn less or barely more than the equivalent of the minimum wage.'

Further Reading:

Cable brands tax avoidance 'corrosive'

Our Parliamentary Correspondent — 2008-09-15T09:21:00.000Z

Our Parliamentary Correspondent, Accountancy Age, Monday 15 September 2008 at 09:21:00

Lib Dems unveil plans to tax 'golden goodbyes' and other anti-avoidance measures in a £5bn package.

Tax avoidance is 'deeply corrosive of the ethical basis of taxation,' the Lib Dem shadow chancellor has said as he unveiled a package of anti-avoidance measures at the party's conference.

Plans to tax 'golden goodbyes' are among the package of anti-avoidance measures claimed to be worth £5billion annually

Vince Cable spelled out his proposals at a packed fringe gathering sponsored by the ICAEW in Bournemouth.

Cable said he would welcome accountants' advice on his proposals but made it clear that he is opposed to wealthier taxpayers using professional advice to avoid paying taxes intended to be due, labelling avoidance 'deeply corrosive of the ethical basis of taxation' and making clear some 'retrospection' is inevitable.

He said the 'golden goodbye' crackdown would use general anti-avoidance provisions to prevent 'disgraced former heads of business' subject to 'de facto firing' from claiming the redundancy exemption and structuring their payouts to benefit from other loopholes.

His package also includes:

banning the use of special vehicles and offshoring to avoid paying stamp duty on property transactions;
ending venture capital trusts and enterprise incentive schemes which Cable claimed do not actually encourage innovative and entrepreneurial activity;
aligning capital gains tax with income tax;
imposing an investment income surcharge to treat unearned income on the same basis as earned income; and
ending the £30,000 'poll tax' on non-doms, restoring non-dom status for foreigners working in the UK for up to seven years and taxing them as British residents on all their income thereafter.

ICAEW technical committee head Francesca Lagerberg, from Grant Thornton, warned representatives 'fairness' was an inadequate criteria for tax policy because it meant different things to different audiences and urged 'reasonableness', 'proportionality' and 'certainty' should be considered as well.

The ICAEW has organised a series of meetings at all three party conferences, some in private with senior members of the government and the Conservative leadership as well as delegates.

Some of the Big Four are also intervening at the Labour and Tory conferences in a bid to influence the political agenda on issues well beyond accountancy.

Lagerberg later warned the government has not consulted widely enough on proposals expected in the autumn statement designed to stop 'income shifting' between husbands and wives in small businesses and urged a 'reality check' to ensure proposals 'do what it says on the tin' and do not have unintended consequences.

Clegg faces dissent over tax cuts

AccountancyAge.com — 2008-09-15T09:18:00.000Z

AccountancyAge.com, Accountancy Age, Monday 15 September 2008 at 09:18:00

Clegg is facing dissent from party members today who will challenge him over his proposed tax policy

Dissenting Liberal Democrat members will today challenge Nick Clegg over his key manifesto to only deliver tax cuts if there were money left after ₤20bn government expenditure.

Party opponents fear plans to find tax savings will take the party towards the right and away from their centre-left traditions, a charge Clegg fiercely denies, according to Reuters.

Clegg told the gathering of delegates in Bournemouth at the party's autumn conference yesterday, that about ₤20bn, or 3%, of budget spending would be reassigned to priorities such as like schools and mental health care and tax cuts would be introduced only if there was money left over.

In a question and answer session at yesterday's conference, Clegg wanted his plan to be described as ‘redirecting’ public expenditure, rather than cutting it.