The UK government has published a consultation document on a code of practice on tax for banks.
According to the Treasury’s announcement, the code sets out “the behaviours the government expects from banks in the management of their tax affairs” and in their relationship with HM Revenue and Customs (HMRC), including governance, tax planning and the relationship between banks and HMRC.
“While banks play a vital role in the UK and are important contributors of tax, it is clear that many continue to be involved in tax avoidance that goes well beyond reasonable tax planning,” said Financial Secretary to the Treasury Stephen Timms. “This code is part of our work to minimise tax avoidance and ensure that large businesses such as banks have a clear understanding of the behaviours the tax authorities expect from them.”
“As part of the consultation we will be talking directly with banks to develop a shared understanding of the principles that underpin the code and, in particular, what it will mean in practice for banks,” Timms continued. “This is vital to ensuring that the code plays a part in changing the behaviour of banks and in turn minimising the loss to taxpayers through tax avoidance.”
The Code of Practice will be introduced in the Autumn of 2009. In the meantime, the government has opened a consultation exercise which will run until September 25, 2009.
Feedback is being sought on a range of issues, including introducing and complying with the code, how uncertainties arising in interpreting the code could be dealt with and what support banks can expect from HMRC in return. The government and HMRC will be speaking directly with banks operating in the UK to develop a “shared understanding” of the principles and implications of the code.
The Chartered Institute of Taxation (CIOT) welcomed the consultation and the fact that the code is designed to ensure that banks follow the ‘spirit’, rather than the letter, of tax law.
“The CIOT’s initial view is that much of the code reflects good governance and the need for an open and transparent relationship with HMRC which we support,” the Institute commented. “However, the CIOT would prefer that the process of making tax law is improved so that it is clear to all what the intention of Parliament was and so codes seeking to establish what the intention might be are unnecessary.”
Peter Fanning, CIOT Chief Executive, added: "Defining the purpose of established law can be very difficult. The quantity of HMRC guidance is ample proof of this. Even in law, not everyone agrees. The challenge is to decide who decides what the ‘spirit’ of the law is and how they decide it.”
Fanning concluded: “If future tax law is clear then following its ‘spirit’ will be much easier but establishing the ‘spirit’ of previous complex legislation will be a challenge.”
.
Network Tweets Archive
| Resources | Partners
| Site Map | Links
| Newsletter
Archive | Contact
| RSS Feeds
About | Syndication |
Advertising & Marketing |
Recruitment |
Terms & Conditions |
Privacy
Copyright © 2012 - All Rights Reserved - Tax-News.com
All content provided by BSI Media
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment