HMRC dodges cuts to beef up avoidance fight

Editor
AccountingWEB.co.uk
Share this content
1

HMRC emerged as the Chancellor’s pet department in the Autumn Statement. With billions of pounds of cuts promised for central government departments over the next two years, HMRC escaped unscathed. Instead the chancellor confirmed the £77m package to fight tax avoidance announced on Monday.

In the detailed statement, a total of £155m was promised to increase compliance and revenue as well as expanding online service delivery and the reduction of tax credit errors and fraud. The extra amount will be made up of additional funding and reinvestment. The initiatives would contribute an extra £2bn to HMRC’s revenues in 2014-15 and reduce tax credit losses by more than £1bn over the next four years, the statement said.

Confirming that the theme o...

Please Login or Register to read the full article

Replies

Please login or register to join the discussion.

…but nothing on Permanent Establishment so far.

Specifically, nothing to amend  s.148(5) FA 2003 which exempts a warehouse from being a P/E.

If this bit of legislation were amended so that, e.g. a warehouse above a certain size were henceforth a P/E, then that would (for example) bring Amazon’s UK warehouses into the scope of UK corporation tax.

Such an amendment to UK domestic law would need to take precedence over tax treaties whilst the latter were being renegotiated, but this is not an unknown concept (e.g. in the US, domestic law sometimes overrides treaties).

On the fact of it, this seems like a relatively simple way of bringing the legislation up to date and raising tax revenue at the same time.  Can any of the International CT experts out there can see a reason why this wouldn't work?

Thanks (1)