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Good points all.
The only one I'd question (or perhaps just expand on) slightly is the one about making enquiry correspondence subject to FOI. If that's the only bit of transparency, then it's a bit of a patchy blanket one. It would mean most taxpayers's affairs remained confidential, but others' didn't, depending only on whether their number came up in HMRC's system.
It's also implicitly assuming that an enquiry means something has "gone wrong", whereas in many cases a check is simply a routine check. For example, should the papers involved in a VAT enquiry (which might well include many details of sales) be made public even if the conclusion is that everything is OK, nothing to see, no adjustment to make?
You can't even straighten that out by saying that only papers to support adjustments will be published: at the moment the appetite is to see why HMRC thinks Google Ireland doesn't have a PE in the UK, for example.
Not all companies are equal
Small companies (turnover under £6.5m) currently enjoy a great deal of privacy. They can file abreviated accounts at Companies House, and micro-entities (tunover under £632,000) can file a version of accounts with even less information.
If tax transparancy was to be introduced for large companies, there would be some pressure for the privacy protections to be retained for small and micro entities. I imagine that many owner-managed companies would not be happy about the tax affairs of thier personal or family company being laid bare for public inspection.
Scandi- Noir
Sweden, Norway & Finland make all personal tax returns publicly available & have done for decades!
Scrap Corporation Tax
Rather than tax the profits of a company and then give (at least) partial credit for CT paid when paying a dividend I would argue that CT should be abolished (also allowing many of the tax-breaks designed to stimulate purchase of plant for example, to be rendered pointless) and tax charged to the shareholder when a distribution is made.
PAC and "persons"
I believe these are tempting ideas, but I'm less sure of their utility. I think I'd go back a little further and ask why would removing or diminishing confidentiality produce any increase in public or even PAC confidence that the tax affairs of MNCs are being settled for the right amount of tax? Is there any evidence to support such a removal?
(Limited liability is essentially a contract that balances risks and rewards and applies to all companies. I dont think that confidentiality is part of that equation, on the grounds that legal persons are entitled to operate in confidence, in the same way as others. On the same basis would we extend the removal to LLPs?)
To be sure HMRC had got the "right" ( ie correct) amount of tax would surely mean full disclosure of everything, which, for an enquiry, might in itself raise issues over the confidentiality of material prepared by real people and real tax officials?
And for tax returns to provide any real information would require the detailed tax computations supporting them. Are they devoid of elements that might be of commercial value, like rents, rates of royalties, etc?
An alternative to making everything open, or a lot more open, is one that retains confidentiality for everyone but enhances independent scrutiny over the largest settlements, ie the ones that go before the Assurance Commissioner and Boards. External observers, or full members, could be appointed to be that independent voice. They could be supported by calling on an enhanced NAO for analysis or comment. We could give such an enhanced NAO powers to call in proposed settlements if they felt there were grounds for review.
This avoids the need to liaise with other countries and could be introduced fairly quickly without potential legal arguments over confidentiality and "rights".
PAC report on Google: Is a company a ‘person’?
We have a conundrum. It would seem that altering the law on confidentiality and publishing details of tax settlements is a good thing because it addressees the fishy smell the PAC and others can detect. But at the same time people don’t understand their own tax returns, let alone want to read reports from NAO or anyone else.
How does being democratically elected representatives transform the ability of the PAC to scrutinise over and above people who don’t understand their own tax returns? The NAO does not, as far as I know, “work” for the PAC. They advise and can support them. Despite that, the PAC persists in making basic, even fundamental errors that really impair their ability to scrutinise. From mixing up sales and profits, to accusing cross border companies of VAT avoidance by not understanding the reverse charge mechanism, to assuming the defence of “reasonable care” only applies to the biggest companies. It suggests they assume their role as democratically elected representatives does not require them to seek expert advice before they ask their questions. Beefing up the NAO would help the PAC by giving information that ought to significantly improve their ability to scrutinise.