CONTACT US

For any general inquiries, please fill in the following contact form:

SUBMIT

Tax avoiders’ accountants may have to give evidence to MPs

Tax avoiders’ accountants may have to give evidence to MPs

Subcommittee of MPs to investigate facilitation of avoidance, in wake of Panama and Paradise Papers.

Tax avoiders’ accountants face being forced to give evidence before MPs after a Commons committee announced a series of inquiries in the wake of the Panama and Paradise Papers investigations.

A subcommittee of the Treasury select committee will investigate tax avoidance and evasion, as well as whether HMRC offers “sweetheart deals” to multinationals, while the main committee holds an inquiry into VAT policy.

A series of hearings on tax abuse, examining the practices of major accountancy firms, individual tax avoiders and evaders and the use of the UK’s crown dependencies and overseas territories, will be heard over the next six months.

The announcement was made by John Mann, the subcommittee chair, who described the UK’s failure to force the crown dependencies and overseas territories to publish the identities of shell company owners as “a matter of national shame”.

Mann said the subcommittee would examine how accountancy firms facilitated tax avoidance. “We’ll be pressing the enablers and facilitators in the tax profession and others, summoning them before parliament to hear how their schemes work and how they justify it,” he said.

The Paradise Papers revealed how owners of private jets can set up offshore companies so they can effectively rent the aircraft from themselves, making substantial VAT savings.

Last year Pierre Moscovici, the EU commissioner for taxation, wrote to Britain and Malta warning that infringement proceedings could be brought if they failed to tighten up the law on VAT for private jets and yachts. He told a French TV channel: “There are practices that we have reasons to think are suspect.”

The subcommittee will also investigate the UK’s network of crown dependencies and overseas territories, which have refused to implement new standards on transparency for offshore company owners despite pressure from campaigners and MPs.

Separately, the Treasury committee’s inquiry will focus on VAT policy, including investigating why HMRC was unable to collect almost £13bn of VAT in 2015-16, and the potential impact of Brexit on VAT collection.

Nicky Morgan, the chair of the Treasury committee, said: “HMRC collected around £124bn in VAT last year – over a fifth of the UK’s total tax take – and failed to collect around £12.6bn in VAT. The reasons for why VAT is so vulnerable are somewhat opaque, so the committee will examine how this might be addressed.”

The third inquiry will investigate how HMRC carries out inquiries into whether a company or individual has paid the correct amount of tax and how subsequent disputes are resolved.

HMRC has been accused in the past of offering sweetheart deals to multinationals that enable them to pay less tax so as to resolve potentially costly legal disputes.

“There are concerns about the extent to which HMRC balances its responsibility to collect the right amount of tax due against its obligations to administer the tax system fairly and even-handedly,” said Mann.

“While we cannot look into individual cases, the subcommittee will examine whether HMRC is meeting the standards of its internal governance processes that are intended to ensure that it deals with all tax disputes fairly.”

Last month during a debate in the House of Commons, Labour called for further reforms in the offshore sector and criticised the “inadequacy of a system whereby beneficial ownership data was only accessible to regulators”.

The calls were supported by the Conservative MP Andrew Mitchell, who said: “Registers must be open – to civil society, the media, journalists, non-governmental organisations – if all the relevant dots are to be joined up, as the release of the Paradise Papers so clearly shows.”

The Foreign Office minister Alan Duncan said the government would only pressure the territories to adopt new transparency measures when they became a global standard, and he said an EU commitment to introduce public registers did not meet that threshold.

Source: www.theguardian.com

MORE NEWS

GDPR: 'Don't panic!' data watchdog tells firms

GDPR: 'Don't panic!' data watchdog tells firms
Tough new data protection laws come into effect on Friday that promise to bolster consumer rights. But there are concerns that many firms ...

Google and Facebook accused of breaking GDPR laws

Google and Facebook accused of breaking GDPR laws
Complaints have been filed against Facebook, Google, Instagram and WhatsApp within hours of the new GDPR data protection law taking effect....

Top DFB officials Wolfgang Niersbach, Theo Zwanziger charged with tax evasion over 2006 ...

Top DFB officials Wolfgang Niersbach, Theo Zwanziger charged with tax evasion over 2006 World Cup
Prosecutors have charged two former DFB presidents with tax evasion in connection with the 2006 World Cup affair. The charges relate to a ...

Who's behind the blog

Who's behind the blog

SOCIAL MEDIA