G20 leaders agree tax avoidance crackdown

World leaders meeting in St Petersburg today have agreed a new deal to crack down on international tax avoidance.

Despite the G20 summit being dominated by Syria, a deal was struck to make it harder to hide money in tax havens and force companies to pay tax in the countries where they make profits.

Prime Minister David Cameron said at the summit that making taxes more transparent was “a strong British priority”.

Back in July finance ministers from the G20 backed an OECD plan...

Continued...

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Comments
ShirleyM's picture

I'm all for it    3 thanks

ShirleyM | | Permalink

It isn't about screwing the 'population' for a bit more tax. It's the exact opposite.

It's mostly multinationals, and if they make their profits in the UK, and take UK money out of the country, they should make a contribution to keeping the UK going, before they kill the golden goose altogether.

If they don't get this avoidance sorted, then the politicians really will be screwing the population for more tax, to make up for that avoided by others.

 

BKD's picture

Agreed, Shirley    1 thanks

BKD | | Permalink

And in response to the previous question - yes ;)

Just like Vodafone hey.

IR35 | | Permalink

Just like Vodafone hey.

Or Google, Amazon, or any of the others,

 

I have just take on a client on a charity basis earning 4k a year on a 3800 tax code for not filling self assessment in for 5 years whilst not even self employed.  This is about screwing the poor folks and nothing more.

ShirleyM's picture

Only if they avoid tax!    2 thanks

ShirleyM | | Permalink

How many 'poor folk' avoid tax?

I always thought large scale avoidance was the prerogative of those who would pay large amounts of tax, otherwise they couldn't afford to pay the large fees to promoters of the schemes, could they?

If anyone (rich or poor) is on the fiddle then they can hardly moan when they are caught.

ps. there are many reasons, other than self-employment, why a tax return may be required.

Castroggi's picture

Robert, Shirley, et al, we    1 thanks

Castroggi | | Permalink

Robert, Shirley, et al, we need to take care here: it appears to me that politicians are determined to gloss over the very real distinction between illegal tax evasion and legal tax avoidance. It should be remembered that the tax legislation is drafted by a government agency and as conceded by a retired tax inspector in conversation some time ago, when HMRC use those rules and regulations to maximise the tax due from a tax payer it is said to be 'applying the law', but when a tax payer uses those same rule to minimise the tax due he or she is accused of cheating or worse - see http://cimaaccountant.com/2013/08/21/did-jimmy-carr-just-use-the-wrong-v... . Avoiding tax where is is legal to do so is a perfectly reasonably course of action; evasion is quite another matter, so let's be clear on which we are talking about. Regards, Paul

BKD's picture

You are quite correct, Paul    3 thanks

BKD | | Permalink

But to play Devil's Advocate, it is probably fair to say that HMRC generally apply the law as it is written and do not set out to find weaknesses and odd interpretations in order to increase a taxpayer's liability.

There is a distinction between application of the law and exploitation of weaknesses and loopholes in it - which is what most avoidance involves.

ShirleyM's picture

I agree, BKD    1 thanks

ShirleyM | | Permalink

Nobody is saying that avoidance is evasion. The G20 is making the point that current tax laws did not take account of multi-nationals, and that new worldwide laws need to be introduced to stop them paying little, or no tax, anywhere at all.

In my opinion, multi-nationals trading in the UK should not be given a dirty great advantage over UK business by giving them a dirty great tax advantage. They make full use of their various 'head offices and base of operations' in low tax jurisdictions that in reality are quite frequently unstaffed.

Castroggi's picture

BKD, I would have to disagree

Castroggi | | Permalink

BKD, I would have to disagree.

It's some time since I studied case law so the title of the case escapes me but I do recall one such where an individual was paid a c.£600k 'golden hello' on joining a firm on condition that he made a pro-rata repayment should he leave within a specified period. He did, and from memory was required to repay c.£450k.

Unfortunately his employment straddled the tax year end so in the first year he had income including £600k, and .... yes, you've guessed it, HMRC wanted tax due on the £600k.

When he pointed out that the majority of that money was repaid HMRC's response was that there there was no provision within the tax legislation to make an offset between income in that tax year and the subsequent year, and insisted that the tax due on the £600k was paid in full ... they were 'applying the law'.

Faced with bankruptcy, loss of the family's home etc., the taxpayer contested HMRC's decision and I believe the matter went to the House of Lords before a ruling was made in the taxpayer's favour.

Let's be clear, HMRC have finite resources and will take a commercial view on where those resources are best deployed to maximise the tax revenues collected. As a tax payer I have no particular problem with that, and I can fully understand why it is easier to target tax avoidance rather than tax evasion, since the latter will be deliberately obscured, but let's not kid ourselves that HMRC's actions are governed by some moral notion of 'fair play'.

In this ongoing contest between HMRC and the Tax Planning industry there are no 'good guys' and 'bad guys' as the politicians would have us believe, and the only real winners in my view are the ranks of lawyers on both sides.

Regards, Paul 

BKD's picture

I don't think that we disagree, Paul    2 thanks

BKD | | Permalink

You have cited one example - note that I highlighted the word generally in my post above. 

itp3asso's picture

income before tax    1 thanks

itp3asso | | Permalink

in a previous life i was tasked with oreparing the accounts for a uk closed company wholly owned uk subsidiary of major us corporation .

in simple terms if the top line was 100 and the bottom line nett nett incom before tax was 10 that 10 would betransferred
IN TOTO to the usa parent every year i NO tax of ANY kind would be levied by uk authorities thereon.

this is back in the sevventies when tax free holidays to overseas investors were dispensed willy nilly by govt . to secure
employment in regional blackspots .

in return for buiding a factory in sw england we were given a 12 year tax holiday . when the term expired arrangements were
made by usa parent to close the factory , transfer the operation to belgium and commence another tax
holiday on offer from thzt jurisdiction etc . go figure !!

mwngiol's picture

Evasion/avoidance    2 thanks

mwngiol | | Permalink

I remember when all this Amazon/Google/Starbucks thing came out, and the main argument by their defenders on here was along the lines of "This isn't illegal evasion, it's legal avoidance. If the government don't like it then they should change the law". Well that's what they're doing. Or trying to anyway, we all know that ways will be found around any new laws!

itp3asso's picture

lagopav

itp3asso | | Permalink

geotge

sounds like you should re run " GRETTON " Woods !!!!

itp3asso's picture

lagopv

itp3asso | | Permalink

watchya georgie boy

GRETTON is a play on BRETTON

geddit now --

lagopav is my user name

pedanticity oersonnified -- is waht you are .

hasta la vista is spanish for goodbye and may our paths never cross again in this or the afterlife . Ciao ciao bambino .