Good morning and welcome to Wednesday’s 9am Lowdown.
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Bermuda tops worst tax havens list
Oxfam has released the ‘world’s worst’ corporate tax havens list, identifying Bermuda as the worst offender.
Oxfam ranked the 15 corporate tax havens, stating that these tax havens are the “ultimate expression of the global corporate tax race to the bottom.” According to the research paper, the Oxfam researchers assessed countries against a set of criteria that measured the extent to which countries used three types of harmful tax policies: corporate tax rates, the tax incentives offered, and lack of cooperation with international efforts against tax avoidance.
2 Cayman Islands
9 Hong Kong
15 British Virgin Islands
Commenting on why it is “absolutely critical” the world establishes a worst tax havens list, Oxfam said: “Tax havens are frontrunners in a global race to the bottom on corporate tax. Yet every country is being swept up in this. In an attempt to attract business, governments around the world are slashing corporate tax bills – damaging their own economies, and those of other countries in the process”
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HMRC abandons VAT colouring book plans
HMRC will not pursue unpaid VAT on colouring books sold before April 2017 after discussions with publishers, according to the FT.
HMRC wanted to add 20% VAT to the price of adult colouring books, used as mindfulness tools. Until then, publishers had treated these colouring books as zero rated. In a statement, HMRC referred to a 10995 court case regarding VAT of diaries and address books in their decision to back down on this VAT pursuit, which said these books must be designed to be “read or looked at”.
Stephen Lotinga, chief exec of Publishers Association said: “We have been discussing the issue of VAT on colouring books with HMRC for some time and welcome the constructive manner in which that consultation was undertaken which led to the guidance published today.”
“The solution proposed is a very positive outcome for publishers, booksellers and consumers, and will ensure that the vast majority of colouring books remain free from VAT.”
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Tax could force companies out of Scotland
The SNP’s refusal to implement the UK government’s tax cut for high earners will force companies out of Scotland, the Scottish Conservatives have claimed.
The Scottish Conservative party argues that companies will have to pay higher wages to keep highly skilled workers. According to the BBC, the Scottish government does not plan to replicate a tax cut for higher earners proposed by the UK government. The Scottish Conservatives said this will make Scotland “the highest-taxed part of the UK".
Conservative finance spokesman, Murdo Fraser said: "The reality of the SNP's tax grab is that firms may end up having to pay high quality staff a 'Scottish supplement' simply to persuade them to stay and work here”.
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About Richard Hattersley
Richard is AccountingWEB's Practice Editor. If you have any comments or suggestions for us get in touch.