TaxAdministrationAvoidance bandwagon rolls on

Avoidance bandwagon rolls on

March's Budget was greeted with a combination of astonishment and confusion, to paraphrase a recent contributor to Accountancy Age. Its requirement that promoters of tax avoidance schemes would need to disclose them to the Inland Revenue fuelled dismay and anger among many accountants. Some of that anger may perhaps have been of the mock variety, with the intention of sending a shot across the bows of the taxman and designed to mitigate against further measures. Nevertheless it's had no effect.

Before the Bank Holiday weekend, the Treasury toughened up rules on tax loopholes being exploited by UK film-makers. The new rules order European many film-makers to spend 40% of their budgets in the UK, when involved in co-productions, in order for these films to qualify for tax relief.

With the previous threshold set at 30%, ministers had feared too many productions were taking advantage of the tax regime by shooting films, that would never be released in the UK.

The new threshold follows the media storm that followed the Treasury decision in February to close a tax loophole, used by some film finance partnerships for raising money to fund big-screen productions.

However, that move pales in significance compared to international attempts to crack down on tax avoidance. British tax experts are helping form a task force with the US, Canada and Australia, designed to take on international tax cheats. A new body is now expected to be set up in New York, the result of a plan to fight back against the exploitation of discrepancies in tax avoidance from one country to the next. Its functions will include the identification of avoidance schemes, a pooling of knowledge in how to combat them, and eventually joint action, with schemes designed to prevent taxpayers from playing one country off against another.

On the plus side is the fact that the new regime will not ride roughshod over the UK. With Dave Hartnett, deputy chairman of the Inland Revenue, and Chris Tailby, head of VAT at Customs & Excise, involved in secret talks in Virginia last month, the UK is very much inside the tent on this one.

However, it demonstrates not just the Treasury’s intent to deal with what it considers to be unreasonable tax avoidance, but that its will matches that of other fiscal departments across the world.

Tax advisers and tax collectors may not see eye to eye on this one. But there’s no escaping the facts: tax avoidance may not be illegal but, if it’s large enough, it’s still not going to be tolerated – at home or abroad.

Email comment@accountancyage.com.

Related Articles

LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

3d Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

2w Emma Smith, Managing Editor
HMRC issues updated Trusts Registration Service guidance

Administration HMRC issues updated Trusts Registration Service guidance

3w Emma Smith, Managing Editor
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
‘Improve rather than lose’ disincorporation relief, tax body urges

Administration ‘Improve rather than lose’ disincorporation relief, tax body urges

3m Austin Clark, Reporter
Are you ready for the Trusts Registration Service?

Administration Are you ready for the Trusts Registration Service?

3m Helen Thornley, ATT Technical Officer
Advisers bullish despite Brexit concerns

Accounting Standards Advisers bullish despite Brexit concerns

1y Fraser Simpson, Reporter
Brexit: Five questions accountants should be asking

Accounting Firms Brexit: Five questions accountants should be asking

1y Fraser Simpson, Reporter