There’s no avoiding avoidance

It’s a subject creeping up the boardroom agenda, but for tax advisers and HM
Revenue & Customs it’s already at the summit, as last week’s launch of the
Oxford University Centre for Business Taxation demonstrated.

The great and good of the tax world gathered to listen to Hundred Group
chairman Jon Symonds and HMRC director general Dave Hartnett share a platform
with a handful of handpicked and distinguished academics.

The exchange was mostly amicable ­ Symonds and Hartnett are, after all,
highly professional, polished and have worked on too many committees together to
be anything other than cordial. But their exchange ­ and the chatter during the
drinks reception afterwards ­ highlighted the divisions opening up between
business and government on avoidance.

Symonds, the UK’s most senior FD, and not a figure known for crying wolf,
said government had a responsibility to make the UK as competitive a place to do
business as possible. And he expressed a passionate belief that business should
pay more tax ­ as a result of making more profits. It was a well-made and
deliberately mischevious point, designed to illustrate that business and
government can share the same goals.

Hartnett stressed he was speaking with the full backing of Gordon Brown.
Welcoming the birth of a US-style academic centre that will be fully operational
and generating policy ideas by next September, he stroked platitudes until they
purred like epigrams, to borrow another US import.

So far, so cosy. But away from the platform the two are unlikely to agree
quite so much. Symonds says he wants to move on from the tax avoidance debate.

Hartnett, who is getting rather good at ruffling corporate feathers these
days, says he would be happy to do so. But only when it ceases to be such a
material issue in terms of loss to the public purse. He has given business until
2008 to stop avoiding tax inappropriately.

Where do we go from here? Well, the taxman is likely to seek a scalp or two
in the coming months. And, in Debenhams, it might have found one. HMRC will then
want to see signs that corporates have turned over a new leaf, something that
will be far harder to demonstrate.

So will avoidance be the number one accountancy issue in 2006? Probably. And
2007 and 2008 too? This one might just run and run.

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