Paying Your Dues: closing the business tax gap

Richard Murphy, Director, Tax Research LLP
Judith Knott, Director of CT, International & Anti-Avoidance, HMRC
Vanessa Houlder, Economics Team, Financial Times
Chas Roy-Chowdhury, Head of Taxation, ACCA
Ian Mulheirn, Director, SMF

We are delighted to be hosting the first of our expert breakfast roundtable events on how best to shore up the UK tax base.

The recent controversy over HMRC’s implementation of retrospective legislation to prevents tax avoidance activities by Barclays has put the issue of corporate tax avoidance back in the spotlight. At the same time as domestic avoidance activities are coming under scrutiny, globalisation and tax havens threaten to erode corporation tax receipts. Some large multinationals have been the focus of protest from groups such as UK Uncut about the legitimacy of their tax affairs.
With the corporation tax gap estimated by HMRC at £4.8bn each year, some 11.7% of total liability, policing the opaque boundary between evasion and avoidance is critically important.

The authorities’ response to these activities is the subject of huge debate. Does retrospective legislation create unacceptable levels of uncertainty for business? On the other hand, if companies are allowed to stick to the letter while infringing the spirit of the law without fear of retrospective action, does this risk stoking an unproductive industry in innovative tax avoidance, which ultimately imposes a substantial economic cost on society? And would a clearer definition of the principles of corporate taxation square the circle between business certainty and retrospection?

As the government seeks to cut the deficit, this breakfast debate will explore these questions and ask how we can design a dynamic tax system that is both economically efficient and fair.