04 Aug

New global tax rules just a sticking plaster – MPs say

New international rules to tackle global tax avoidance will not work properly until tax secrecy is swept away, a report released by the All Party Parliamentary Group (APPG) on Responsible Tax has found.

The failure to introduce full transparency into the tax system, MPs say, means that the Organisation for Economic Co-operation and Development’s (OECD) action plan for tackling profit shifting (BEPS) has fallen short of creating the fair global system needed to combat global tax avoidance.

The report raises concerns that the OECD recommendations simply patch up existing rules and are not sustainable for a tax system struggling to keep up with both digitalisation and globalisation. The report calls for a fundamental review of the way in which global companies are taxed.

The APPG on Responsible Tax has said that the OECD recommendations could bring new and greater complexities to the international tax system that could lead to the emergence of new loopholes.

Dame Margaret Hodge MP, chair of the APPG on Responsible Tax said:

“The OECD has done well to build consensus but the proposals are likely to fail to meet the challenge of tackling global tax avoidance.

“We need to open up the affairs of global companies to public account if we are to clean up the widespread abuse that pervades so many international businesses. Only when we know who owns what, where the assets are owned, where the money is earned and what tax has been paid, can we have confidence in the fairness and integrity of the tax system.

“The new rules add to an already complicated tax system. Corporations, aided by an army of advisors, banks and lawyers, can exploit these rules to avoid paying tax where value is genuinely created. This, could further undermine public trust in the tax system.”

The report is critical of the role of the UK government which has been a ‘difficult friend’ of the process, leading on the OECD’s work in public while undermining the effectiveness of the same proposals behind the scenes.

Mrs Hodge said:

“The government has been facing both ways. While publicly proclaiming their determination to tackle global tax avoidance, they have been encouraging these practices by changes they have made to the UK tax system and by refusing privately to agree to some key OECD proposals. Their unwillingness to get tough on our Overseas Territories and Crown Dependencies, home to a number of tax havens, by forcing them to introduce public registers of beneficial ownership is frustrating.

“The new prime minister must put an end to tax secrecy. The UK Government should take a leading role and introduce public country-by-country reporting. The UK Government should use the law to end the secrecy that encompasses tax havens. The Government should work internationally to create rules that are sustainable and that ensure tax is properly paid where value is actually added.”


You can download a copy of there report here.

11 May

Enforce property transparency for foreign firms MPs urge the Prime Minister

The Rt. Hon. Dame Margaret Hodge MP chair of the All Party Parliamentary Group (APPG) on Responsible Tax, and the Rt. Hon. Frank Field MP, today warned the Prime Minister that property ownership registers, a key anti-corruption policy, risk becoming a meaningless PR stunt, if not enforced robustly.

In an open letter to the Prime Minister the MPs praised the policy that will force foreign companies to declare the true ownership of UK property assets. However, they called for the registers to be made public to ensure complete accountability. They also called for the legislation to be drafted in a way that would create no new loopholes.

The Rt. Hon. Dame Margaret Hodge MP, said:

“The Prime Minister’s announcement is a welcome step to tackle money laundering on the UK’s property market. However as always, the devil is in the detail.

“Unless these register are truly public, are robustly enforced, and are tightly drafted his announcement becomes little more than a PR stunt. Failure to do so will undermine the positive progress made at today’s summit.”

The Rt. Hon. Frank Field, MP added:

“I sincerely hope that the Prime Minister is able to provide answers to our questions. This policy demonstrates potential for a strong weapon on the fight against corruption; we simply ask for confirmation in certain areas.

“Confirmation will undoubtedly restore the public’s confidence in the government’s mission to combat corruption.”


16 Nov

Margaret Hodge MP calls for evidence on responsible tax following launch of first APPG website to allow public input

Margaret Hodge MP today issued a call for evidence on responsible tax following the launch of the first All Party Parliamentary Group (APPG) to accept contributions and ideas from the public on a website, which allows stakeholders to directly participate and digitally engage in the debate.

The new parliamentary group is committed to investigating how parliament can help to build and maintain a fair, sustainable and transparent tax system, both in the UK and internationally.

The group’s website – which goes live today at www.appgresponsibletax.org.uk- allows people to contribute to its research and reports.

This is the first time that an APPG has enabled the public to add their views in an online platform. The group aims to be as clear and transparent as possible and to encourage open and ongoing dialogue between different stakeholders who want to work towards a shared understanding of what responsible tax behaviour looks like.

The group’s consultation papers and publications will directly attribute contributors’ ideas and evidence throughout the process.

The APPG are asking for members of the public to comment on the terms of reference for the current BEPS project, which will be followed by a call for evidence next week.

The APPG, which is chaired by Margaret Hodge, will focus on three areas in the coming year, beginning with a consultation on the OECD’s Base Erosion and Profit Shifting recommendations to the G20. Later work in 2016 will include an enquiry into HMRC’s capacity to deliver fair tax and the examination of tax reliefs and simplification of the tax system.

Other group members include vice chairs David Davis MP, Richard Bacon MP, Lord McFall and Stewart Jackson MP, the APPG Secretary.

Margaret Hodge, the former Chair of the Public Accounts Committee, said:

“I am excited about the launch of our new website. During my time as Chair of Public Accounts Committee it was clear that openness and transparency lies at the heart of any successful project. I hope that we set a new standard for transparency for APPG’s and groups of this kind.”

“We want to start an open discussion around the responsible tax agenda with as many people with a broad range of views. By enabling the public to contribute their views directly on to the site, interested parties can observe the development of our work in real time and look at contributions from others.

I urge anyone who wants to have their say and influence how the UK builds and maintains a fair and responsible tax system, to get involved and give their views via our new website.”

The joint secretariat of the APPG are think tank CoVi (Common Vision) and CIPFA (the Chartered Institute of Public Finance and Accountancy).


15 Sep

New All-Party Parliamentary Group on Responsible Tax announced today

Today a new All-Party Parliamentary Group (APPG) for Responsible Tax was announced in Parliament, with endorsements from organisations including think tank CoVi, Action Aid, the CBI, Oxfam and CIPFA.

The APPG for Responsible Tax will be chaired by the Rt Hon Dame Margaret Hodge, Labour MP for Barking, and former chair of the Public Accounts Committee from 2010 to 2015.

Margaret Hodge will be supported by three vice-Chairs: David Davis, Conservative MP for Haltemprice and Howden; John McFall, Lord McFall of Alcluith; and Richard Bacon, MP for South Norfolk and member of the Public Accounts Committee. The Secretary of the group is Stewart Jackson, MP for Peterborough.

The group has pledged to explore the ways in which Parliament can help to build and maintain the fair, sustainable and transparent tax system that is needed if individuals, businesses and markets are to create growth and prosperity both in the UK and internationally.

Announcing the new group at an event hosted by CoVi in London today, Margaret Hodge MP, Chair of the new All-Party Parliamentary Group on Responsible Tax, said:

“In recent years the issue of who pays tax and how much they pay has really struck a chord with the public. We want Parliament to continue to play a key role in building and maintaining the fair, sustainable and transparent tax system that is needed to create growth and prosperity both in the UK and internationally.”

The group also has fourteen current members from across the political spectrum.