UK PM calls for clampdown on tax avoidance
Separately, ACCA says tax system is not a tool for regulating banks
By Gaurav Sharma | CFO UK | Published 15:41, 25 January 13
UK Prime Minister David Cameron has called for a clampdown on tax avoidance and said he would make the issue a top priority at the G8 meeting scheduled to be held later this year under his stewardship.
Speaking at the World Economic Forum in Davos on Thursday, Cameron said, "Tax avoiders need to wake up and smell the coffee. Individuals and businesses must pay their fair share...I am a low tax Conservative but not a 'no' tax conservative."
"Some forms of tax avoidance have become really aggressive. International co-operation is needed to make sure that global companies pay their fair share of tax. This is a problem for all countries, not just for the UK," he added.
The PM said that "trade, tax and transparency" were key economic priorities for the G8 group of nations whom he will chair at a summit in June.
Cameron also defended his offer of a referendum on the UK's membership of the European Union after 2015, should negotiations on a revised relationship fail and if the Conservatives win the next election.
"Europe is being out-competed, out-invested and out-innovated. This is not about turning our backs on Europe – quite the opposite. It's about how we make the case for a more competitive, open and flexible Europe – and secure the UK's place within it,” he added.
"When you have a single currency you move inexorably towards a banking union and forms of fiscal union and that has huge implications for countries like the UK who are not in the Euro and never will be," Cameron concluded.
Meanwhile, a spokesperson for the Conservative MP Stephen McPartland confirmed that he had written to the chief executives of all of the companies in the FTSE 100 index in November, asking for their views on additional tax disclosure requirements.
A majority of the 52 replies he has received so far suggested that most opposed any new regular tax disclosure requirement. Elsewhere on taxation matters, representatives from ACCA have told a UK parliamentary committee that it does not believe the tax system itself is to blame for excessive leverage in banks.
Giving evidence to the Committee for Banking Standards Panel on tax, audit and accounting on the topic of banking tax practices, the ACCA said on Thursday that excessive leverage in banks is a failure of management to properly recognise and address the risks which are inherent in any system.
In respect of imposing a special tax regime on banks, Chas Roy-Chowdhury, Head of Taxation at ACCA said, "We do not think it is appropriate to think of using the system as a tool for imposing specific cultural or moral frameworks on particular types of businesses."
However, Roy-Chowdhury agreed that issues of culture and value should be of great importance to any business from the perspective of "corporate governance rather than the tax system."
ACCA believes that the tax system should be as simple and consistent as possible for all taxpayers.
"The simpler the system and the fewer the differential levels of taxation available within it, the less will be the incentive to 'plan'. If the system is complex then advisers and intermediaries can, and indeed must, be aware of all the alternatives within it," Roy Chowdhury concluded.
The panel was formed by the Parliamentary Commission on Banking Standards (PCBS) and is being chaired by former Chancellor of the Exchequer Lord Lawson.
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