New UK Tax Chief Says Corporate Tax Evasion An Issue Of Concern

by Robert Lee, Tax-News.com, London

10 November 2004

David Varney, the new chief of HM Customs and Revenue told Dow Jones Newswires on Tuesday that corporate tax avoidance schemes were an issue of “concern” that must be tackled by legislation.

Speaking on the sidelines of the Confederation of British Industry’s annual conference in Birmingham, Mr Varney, who vacated the chairmanship of mobile telecoms firm MM02 to become the first head of the merged Inland Revenue and Customs super-department, revealed that Chancellor of the Exchequer Gordon Brown is likely to unveil new anti-tax avoidance measures in his pre-budget report next month.

Revealing that he views the issue as a growing problem, Varney noted: "Aggressive tax avoidance schemes are a concern, which requires an appropriate legislative response."

However, in relation to declining corporate tax receipts, he added that it must be determined whether this is more to do with a decline in company profits or structural issues.

Varney also acknowledged that there is no firm estimate as to the extent of the ‘tax gap’ between taxes paid and taxes owed to the government, although he estimated a figure of around 8% of gross domestic product per year.

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