Print Page   |   Report Abuse
News & Press: International News

UK: Revenue confident of being cleared on 'sweetheart' tax deals

11 June 2012   (0 Comments)
Posted by: SAIT Technical
Share |

By Alex Hawkes and Jon Rees (Daily Mail)

Top Revenue officials are optimistic that they will be cleared of arranging ‘sweetheart' tax deals with multinational companies when a former High Court judge reports this week.

Sir Andrew Park will deliver the report on Thursday into tax deals with mobile phone giant Vodafone, investment bank Goldman Sachs and three other unnamed companies.

The report was ordered amid public concern over suggestions that Revenue officials were too close to big companies and were agreeing generous tax settlements after being wined and dined by big companies and their accountants.

Top officials are said to be hopeful that Park will clear them of most of the claims, except in relation to the Goldman Sachs deal, where the Revenue has already admitted it made a mistake.

‘The impression seems to be that officials feel the results they obtained on the deals are going to be vindicated,' a source said.

Senior officials are likely to have seen early copies of the report. Draft National Audit Office reports are commonly circulated in advance, to ensure that minor mistakes are picked up.

Dave Hartnett, the Permanent Secretary for Tax, and Revenue chief executive Lin Homer, are already due to be questioned on the report by the Public Accounts Committee on June 27 – and Park is said to be planning to give evidence to the Committee in private.

Hartnett's reputation in particular is on the line, given his close involvement with both the Goldman Sachs and Vodafone deals.

Critics have suggested that Vodafone was let off a tax bill of up to £6billion when it signed a deal with the taxman in 2010 over its use of a Luxembourg-based company to finance its overseas subsidiaries.
Vodafone paid £1.25billion as part of the deal, but critics argue that it should have paid more given the sums of money moving through its Luxembourg subsidiary.

The deal was struck after nine years of legal argument and Park's decision is likely to hang on whether the taxman could have got any more than £1.25billion, given the weakness of UK rules on overseas tax avoidance.

Goldman Sachs was forgiven interest due on a tax bill on bankers' bonuses.
The Revenue has admitted making a mistake – costing the exchequer up to £8million – by thinking that it could not charge the interest when it signed the deal.
Tax campaign group UK Uncut will separately argue in the High Court on Wednesday that the Revenue's settlement deal with Goldman Sachs should be overturned.



WHY REGISTER WITH SAIT?

Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

MINIMUM REQUIREMENTS TO REGISTER

The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

Membership Management Software Powered by YourMembership  ::  Legal