UK Opens Inquiry On Improper Tax Practice

; posted on
April 5th, 2018

The Treasury Committee in the UK recently opened an inquiry on Tax Avoidance and Evasion. With the investigation, the government hopes to examine what progress has been made in reducing the amount of tax lost to avoidance and offshore evasion and whether HMRC has the resources, skills and powers needed to bring about a real change in the behaviour of tax dodgers and those who profit by helping them.

Tax Avoidance and Evasion inquiry

The inquiry consists of six questions, and submission of evidence in response to any of the questions should be sent by May 31, 2018. The questions are:

  • To what extent has there been a shift in tax avoidance and offshore evasion since 2010? Have HMRC efforts to reduce avoidance and evasion been successful?
  • Is HMRC adequately resourced and sufficiently skilled to identify, challenge and counteract existing and new avoidance schemes and ways of evading tax? What progress has it made since 2010 in promoting compliance in this area and preventing and responding to non-compliance?
  • What types of avoidance and evasion have been stopped and where do threats to the UK tax base remain?
  • What part do the UK’s Crown Dependencies and Overseas Territories play in the avoidance or evasion of tax? What more needs to be done to address their use in tax avoidance or tax evasion?
  • How has the tax profession responded to concerns about its role in aiding tax avoidance and evasion? Where does it see the boundary between acceptable and unacceptable practice lie?

Responds of UK’s Dependencies

The overseas territories and Crown Dependencies of the UK have announced to be ready to collaborate with the country’s inquiry into tax evasion and avoidance, including Guernsey. But there are opinions arguing the implementation of CRS, as well as other anti-avoidance rules have reformed the alleged offshore finance service industry in recent years, with doubts whether such inquiry is necessary or not.

Sources: International Investment, UK Gov

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