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Talking points, 23 May 2014

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‘Like it or not, UK governments over the last decade have constructed a tax system which, although it may not cause the acquisition of British crown jewels by overseas investors, certainly encourages it.’

George Bull (Baker Tilly) commenting on why we can expect to see more hostile takeover bids now the UK seen as corporate tax haven.

‘This is a seriously flawed study based on, among other things, a significant overestimate of the UK’s VAT gap. HMRC’s estimates, produced under the code of practice for official statistics, show the overall tax gap is £35bn and falling as a percentage of tax owed.’

HMRC dismisses findings from the study titled ‘In the shade: Research on the UK’s missing economy’ by tax campaigner Richard Murphy of Tax Research UK. The report said that the Treasury is losing more than £40bn of tax a year, almost four times the amount official figures suggest, because of evasion and the hidden economy.

‘HMRC’s late filing system starts off with the premise that the taxpayer is wrong – you then have to prove your innocence. In a lot of “borderline” review cases, where we feel the taxpayer should be given the benefit of the doubt, HMRC is now rubber-stamping the automatic penalty.’

Simon Newark (UHY Hacker Young), commenting on data obtained by the accountancy firm which showed that 49% of the 17,200 automatic penalties issued by HMRC for the late filing of VAT returns in 2013 were overturned when taxpayers requested a review.

‘This was another scheme that wasn’t worth investing in and, as well as the fees investors will have paid to the promoters, they will now have to pay the tax owed as well as interest.’

Financial secretary to the Treasury Nicky Morgan commenting on the ‘blue box’ avoidance scheme in the Ferguson v HMRC case

Issue: 1217
Categories: In brief