TaxCorporate TaxLarge business initiative suffers low uptake

Large business initiative suffers low uptake

Figures show that just 18 requests for rulings have been submitted since the advance agreement unit was launched by former HMRC chairman David Varney in October 2007

Sir David Varney, former chairman of HMRC

Sir David Varney, former chairman of HMRC

A key corporate tax initiative, aimed at giving multinationals early
certainty over their affairs, has dealt with just 18 cases in as many months.

The advance agreement unit was set up by former
HM Revenue &
Customs
chairman David Varney in 2006 to provide big business with a ‘system
of advance rulings’ to offer ‘certainty’ over their tax arrangements in relation
to investments and restructuring.

But figures obtained by Accountancy Age under the Freedom of
Information Act reveal that just 18 requests for rulings have been submitted
since the unit was launched in October 2007.

The certainty provided by advance agreements on complex tax issues was seen
by the CBI as offering ‘a significant package which will make a real difference
in taking forward the relationship between business and HMRC’.

Varney’s review followed complaints from business of a deteriorating
relationship with HMRC in the wake of a raft of anti-avoidance and disclosure
rules introduced in 2004 and 2005. Critics inside HMRC claim the political need
for a business-friendly review was greater than any real demand from business
for initiatives such as advance agreements.

An HMRC spokesman said: ‘It is wrong to suggest that the number of
applications received means the procedure isn’t working. We have received very
positive feedback generally on the advance agreements unit’s work and, in
particular, on the certainty it provides for the businesses dealt with.’

Another possible reason for the low demand for advance agreements is the
economic deterioration since 2007. The unit was expected to benefit
multinationals investing in the UK, but direct foreign investment almost halved
from £98bn in 2007 to £52bn in 2008.

Related Articles

‘Google tax’ nets HMRC £281m

Corporate Tax ‘Google tax’ nets HMRC £281m

3m Emma Smith, Managing Editor
OTS report: Corporation tax should follow accounts

Corporate Tax OTS report: Corporation tax should follow accounts

5m Alia Shoaib, Reporter
HMRC tax evasion assistance requests double in five years

Corporate Tax HMRC tax evasion assistance requests double in five years

5m Emma Smith, Managing Editor
Spring Budget 2017: Making Tax Digital

Business Regulation Spring Budget 2017: Making Tax Digital

9m Shereen Ali, Deputy Editor
Tax fraud loses HMRC £16bn

Corporate Tax Tax fraud loses HMRC £16bn

10m Emma Smith, Managing Editor
HMRC nets £2.6bn in corporate tax from big businesses

Corporate Tax HMRC nets £2.6bn in corporate tax from big businesses

10m Accountancy Age editorial
Tax crackdown brings in £468m for HMRC

Corporate Tax Tax crackdown brings in £468m for HMRC

11m Accountancy Age editorial
Treasury Select Committee report released on Making Tax Digital

Accounting Standards Treasury Select Committee report released on Making Tax Digital

11m Stephanie Wix, Writer