TaxCorporate TaxRevenue changes tax tactics

Revenue changes tax tactics

The Inland Revenue has signalled a change of approach in the way it goes about tackling tax avoidance, saying companies that pursue more gentle schemes will get 'business benefits.'

Link: PBR in depth: Squeeze put on VAT avoidance

Speaking exclusively to Accountancy Age before yesterday’s pre-Budget report, Stephen Jones, director of the Inland Revenue’s large business office, said he would expect accountants to operate using their ‘full armoury’ which often means ‘testing the boundaries of the law to destruction.’

But he said people who take that approach can not have it both ways.

‘They can’t say, “I want to do the most aggressive things to minimise my tax liability and I want to have a nice and easy ride with the Revenue or with Customs”,’ he said.

But accountants and tax experts are becoming disillusioned with the increasingly aggressive tactics employed by the government. Chas Roy-Chowdhury, head of tax at ACCA, said: ‘Every last inch of tax avoidance will be clamped down on.

‘It will be another nail in the coffin of the UK being seen as a business-friendly country.’

Jones said his response to companies will be conditioned by what the LBO perceives its approach to tax compliance to be.

‘We see part of our job as encouraging people into the more compliant camp,’ said Jones. ‘We believe that for people who are prepared to take a less aggressive approach to tax we can provide some business benefits for them that they will value.’

One of these, he said, could be greater and earlier certainty in their tax affairs.

‘It’s not fair for the Revenue to give special treatment to one group of tax payers,’ said Derek Brownlee, tax executive at the Institute of Directors. ‘Everyone who abides by the law should be treated fairly and equally.’

For full pre-Budget report coverage, go to www.accountancyage.com.

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