The government’s much-vaunted crackdown on corporate tax avoidance risks
being seriously undermined by the repeal of a measure that forces multinational
companies to inform HM Revenue & Customs when they move money offshore, tax
campaigners warned yesterday, The Guardian reports.
Unnoticed as part of the Budget’s tax proposals was a Treasury announcement
repealing section 765 of the Corporation Tax Act.
In addition to forcing companies to seek permission from HMRC before moving
cash offshore, it allows tax investigators to ask them whether moving money out
of the UK is to the Treasury’s detriment, The Guardian said. It also
produces information associated with companies’ overseas tax and equity
Section 765 has been cited by HMRC investigators as a vital tool in
combating corporate tax avoidance, which costs Britain an estimated £13bn each
year. But it has long been targeted for repeal by business and major
accountancy practices, the newspaper added.
The proposal will be debated by MPs next week as part of the finance bill and
is the subject of a Liberal Democrat amendment. The Lib Dems argue that Section
765 is a useful tool in combating tax avoidance.
In a statement to The Guardian the Treasury said the government was
modernising tax avoidance rules, in order to help protect tax revenues.
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