Another few weeks in “tax land”

Where to start.

In a speech to mark her first year as Scottish Conservative leader, Ruth Davidson outlined an aspiration to cut income tax by more than 1p when new powers come to Holyrood.  More on this from the Scotsman can be found here.  Now compare this with a survey that claims that three quarters of Scots think taxes should be raised for those with the highest incomes and wealth. More on the survey from the Herald can be found here.  These stories show how Scotland, both the politicians and the general public, are beginning to wake up to the fact that tax is not necessarily just a UK matter.

The Scottish Government has backed the latest call for control over air passenger duty to be passed to the Scottish Parliament.  This is a matter worth remembering when you hear comments from the NO campaign on how they “hope” to give the Scottish Parliament further powers.  Let’s not forget how few tax powers are included in the latest Scotland Act.  It is “Calman minus” just as the Liberals recent Home Rule Commission is “Steel minus”.  More on this can be found here.

First it was Rangers now it is Hearts that is in trouble with HMRC.  The surprise is no-one is surprised.  Hearts owe HMRC approximately £500,000 in unpaid tax.  More on this from the Scotsman can be found here.

The UK Government seems to be doing a fair bit of thinking just now which is always worrying.

The UK’s Chancellor of the Exchequer, George Osborne, has called for a change in international tax standards to reflect changes in business, such as the rise of e-commerce, which makes it easier for companies to shift taxation away from jurisdictions where profit is being generated.  More on this from the Guardian can be found here.  In addition, Danny Alexander, the Chief Secretary to the UK Treasury, has pledged to crack down on corporate tax avoidance following revelations that the supermarket chain Asda may have used overseas transfers to its parent company Walmart to avoid up to £250m in tax.  More on this from the Times can be found here.  Lots of words but can we expect real action?

The Chief Executive of HMRC, Lin Homer, has been put under pressure by the UK Treasury Select Committee to explain why multinationals have been allowed to pay less tax than small businesses in the UK.  The Comptroller and Auditor-General of the National Audit Office, Amyas Morse, said that large companies often put pressure on HMRC by threatening to pull out of the country altogether.  More on this from the Times can be found here.  A connected story from the Daily Mail and involving Margaret Hodge, chairman of the UK Public Accounts Committee, can be found here.

Under “road charging” proposals being considered by the UK Government, motorists could face a new two-tier system in which drivers would pay a lower rate of tax if they do not use the UK’s trunk road network.  Have any of the UK media outlets considered the fact that this is also a matter for the Scottish Parliament?  Of course not.  The new system would comprise a basic charge for the use of local roads, and a secondary charge for those motorists wanting to use motorways and A-roads.  More on this from the Guardian can be found here.

Is it just me or is it really the case than almost every change in the law is met with the accusation that it breaches some part of EU law?  The latest example is the UK Government’s planned changes to child benefits.  The UK Treasury has dismissed the claims by the Institute of Chartered Accountants of England and Wales.  More on this from the Telegraph can be found here.

David Gauke, Exchequer Minister to the UK Treasury, has argued that HMRC needs to pay more to recruit the best tax experts in order to combat tax avoidance by major multinational companies.  Edward Troup, Director-General for Tax and Welfare at HMRC, welcomed the proposal, saying: “I think it’s on the record now to have more staff and higher pay”.  More on this from the Times can be found here.  This is an issue that we in Scotland will also have to respond to when setting up our own tax system.

It is often claimed that that the UK Government favours London and the south-east of England. This is another such claim.  The UK Communities Secretary, Eric Pickles, has faced criticism from property groups and retailers after his announcement that a revaluation of business rates has been pushed back to 2017.  The British Property Federation said that it was unfair to expect tenants to continue to pay a levy based on “top-of-the-market” 2008 rents. The UK Government argues however that a revaluation would lead to rate increases for many businesses, especially in the south-east.  More on this from Accountancy Age can be found here.

Now to a story that keeps bubbling up to the surface and clearly is not going away.  First it involved government officials such as the head of the Student Loans Company, then it was the BBC now it is teachers.  HMRC has said that supply teachers hired via recruitment agencies using off-shore firms are causing a shortfall in National Insurance contributions.  An HMRC spokesman said: “These kinds of arrangements are not compliant with tax and National Insurance legislation and the end client, or the employment businesses, may be liable for any underpaid tax and National Insurance”.  More on this from the BBC news website can be found here.

Anyone who regularly looks at HMRC press releases will see HMRC increasingly publicising stories such as this.  An Isle of Wight tax advisor who stole £52,000 by claiming tax repayments using his clients’ names was jailed today at Newport Crown Court.  The press release from HMRC can be found here.

Let’s end with matters slightly further afield.  Hong Kong has imposed a 15% emergency tax on foreign buyers of residential property in an attempt to hold back the island’s property bubble. Stamp duty for short-term speculators has also gone up from 15 to 20%.  Similar measures have been imposed by the Singaporean Government.  More on this from the excellent STEP Journal can be found here.

One last point.  Patriotism takes many forms and that includes paying your taxes.

Have a good week.

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