Financial Secretary to the Treasury comments on tackling tax avoidance

September 22nd 2009

The speech of the Financial Secretary to the Treasury Mr Stephen Timms MP at the International Conference on Tax Analysis at HM Treasury on 21 September 2009 has been widely reported and can be accessed at:

http://www.hm-treasury.gov.uk/speech_fst_210909.htm

The FST suggests that the government has plans to tackle tax avoidance by

• Rigorous investigation of existing schemes- with a particular emphasis on information powers
• Tightening the tax avoidance disclosure requirements so that there will be more disclosures and so HMRC will be sure they know who is using schemes
• Principles based legislation - although he recognised this was difficult to get right
• Codes of conduct like the Banking Code of Conduct

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageExcise_ShowContent&propertyType=document&columns=1&id=HMCE_PROD1_029639

• and what may come from the Consultation Document on Working with Tax Agents

http://www.hmrc.gov.uk/about/tax-agents.htm

He did not mention retrospective legislation.

The Financial Secretary also talked of relentless pursuit of tax evasion- whether in the UK or offshore. He claimed HMRC obtained an extra £12 billion last year from  ”compliance interventions”. He also said,

“This summer, HMRC served notices on 308 other financial institutions to hand over details of those who are cheating on tax by hiding income and gains in offshore accounts.  This New Disclosure Opportunity offers a further, final opportunity to come forward on advantageous terms.  In the Pre-Budget Report we will spell out the consequences for those who don’t.”