Revenue in governance talks on loopholes

The Inland Revenue is in talks with UK businesses, the accounting bodies and the Financial Reporting Council in an attempt to make tax avoidance a key component of corporate governance.

The department said it wants to learn from the US’s Public Company Accounting Oversight Board and the way it has made corporate tax a major business responsibility issue.

David Garlic, head of HM Revenue & Customs large business service, is leading the efforts and is in regular communication with the business world. He is running a project called ‘tax on the boardroom agenda’.

Chris Tailby, the director of the department’s newly-established anti-avoidance group, said the Revenue was working hard in an attempt to increase tax transparency.

‘We are talking to the accounting bodies in terms of accounting standards and we have certainly been talking to the FRC,’ said Tailby. He confirmed that he also intends to approach the accounting standards-setters. Paul Boyle, chief executive of the FRC, said he would be happy working with the department.

A report by Henderson Global Investors earlier this month found that many UK companies believe they face a medium to high risk in attempting to reduce tax. ‘Companies are under increasing pressure to include tax management as part of their overall approach to good corporate governance,’ it said.

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