The Chair and Officers of the APPG on Responsible Tax determine the workstreams and activities of the group. At the inaugural meeting on 14th September 2015 the following areas of interest were agreed:
- An examination of the OECD’S BEPS recommendations to the G20
- An enquiry into HMRC’s capacity to deliver fair tax
- An examination of tax reliefs and simplification of the tax system
The group will pursue these areas of interest as separate, sequential workstreams.
In recognition that these are complex topics which require both deliberative discussion and technical understanding but must also be open to participation from a wide range of stakeholders we have established ourselves as the first digital APPG.
Inquiry into public confidence in HMRC’s capability to collect tax fairly and effectively
Further to feedback on the draft terms of reference this consultation opened formally on Thursday 8th September 2016. The deadline for initial written submissions was Monday 24th October 2016, the consultation closed on 23rd December 2016.
This is the second workstream of the All Party Parliamentary Group on Responsible Tax, looking at levels of public confidence and trust in the capability of HMRC to collect tax fairly and effectively. This includes looking at customer service experience and how HMRC fights tax avoidance and evasion.
It is recognised that ‘trust’ is a difficult term to define precisely. Here, we define trust as relating not to the honesty or integrity of HMRC and its staff but to their ability to effect certain outcomes. In particular, this means collecting tax effectively (that is, reducing the ‘tax gap’ between what is owed and what is collected) and fairly (that is, not wittingly or unwittingly applying rules in an inconsistent manner). We posit that the two particular circumstances that contribute to public trust or distrust in HMRC: the general public’s direct interaction with HMRC through their own tax affairs; and the publicity of HMRC’s success or otherwise in combatting tax evasion and avoidance.
HMRC has received sustained scrutiny about the difficulty taxpayers have in interacting with their services. Waiting times on helplines, errors in written correspondence the complexity of interacting online are consistently highlighted as areas of concern. HMRC has taken steps to improve customer service but there are still questions around the effectiveness of this investment and the progress HMRC is making in improving its service for normal taxpayers.
Meanwhile, the level of public interest in aggressive tax avoidance and evasion remains significant, with LuxLeaks and Panama Papers highlighting the scale of the challenge HMRC and other revenue bodies around the world face. HMRC received 86,000 separate leads in 2015, ranging from local concerns, to commercial avoidance to intelligence that helps HMRC take down criminal gangs.
Terms of reference
The APPG on Responsible Tax is asking participants to respond to one or more of the following terms of reference:
- What levels of trust and confidence do the public have in the capability of HMRC to collect tax in a way that:
- preserves and encourages fairness and equity?
- is an efficient and effective use of resources?
- What can be done to improve the levels of public confidence in HMRC’s capability?
- Does HMRC provide a first rate customer service?
- To what extent does HMRC consider the customer’s experience in the allocation of its resources and the services it provides?
- Is the HMRC strategy for improving the customer experience fit for purpose?
Dealing with tax avoidance and evasion:
- How effective is HMRC in dealing with
- aggressive tax avoidance?
- tax evasion?
- What legislative, resourcing or other measures would help to narrow the tax gap?
- Does HMRC make appropriate use of all the powers and opportunities in its toolkit?
Staffing and resources:
- Are HMRC’s resources adequate?
- Is HMRC able to recruit and retain people with appropriate skills, qualifications and experience?
- Within constrained budgets, what could HMRC do to achieve better and more sustainable services?
We are grateful to those who contributed to our draft terms of reference.
An examination of the OECD’S BEPS recommendations to the G20
This consultation is now closed. You can read the final report here.
The consultation was launched on Monday 23rd November 2015 and focuses on the OECD’s BEPS (Base Erosion and Profit Shifting) process and subsequent recommendations to the G20.
The Base Erosion and Profit Shifting (BEPS) action plan, developed by the OECD since 2013, has identified 15 key areas to combat multinational corporation tax avoidance which were approved by the G20 leaders when they met in November 2015.
The action plan covers a broad range of areas and recommendations including: country-by-country reporting of key financial data by multinationals; model legislation for abusive tax and intellectual property (IP) structures; and guidance on the challenges of taxing the digital economy.
Focus of this consultation
In response to the BEPS process and resulting recommendations, the APPG on Responsible Tax is asking our consultation participants to respond on one or more of the following:
- The effectiveness of the OECD’s current BEPS proposals in responding to the globalisation of businesses, the growth of the digital economy and other challenges.
- The impact of these proposals on the UK, the EU and other developed economies and developing countries. This includes how developing countries raise revenues and fight poverty [change recommended by Jon Date, Action Aid].
- The UK government’s role in contributing to, supporting and implementing the OECD’s BEPS proposals.
- The role of other stakeholders in contributing to, supporting and implementing the OECD’s BEPS proposals.
- The scale and distributional impact of BEPS, and the ability of the OECD or others effectively to track progress over time [addition from Alex Cobham, Tax Justice Network].
- An assessment of the existing and proposed tax changes in the UK which might impact on the effectiveness of the OECD’s proposals.
- The role of non-OECD and non-G20 governments and other international institutions in the agreement of global tax rules [change recommended by Jon Date, Action Aid and Caroline Macfarland, CoVi].
- The longer term challenges which cannot be addressed by the current proposals. Including the actions the UK government could take in its tax policies, including tax treaties, to ensure that UK companies do not make use of tax havens for tax minimising purposes [addition from Jon Date, Action Aid].
- Principles which could be considered over time as effective mechanisms for dealing with the changing global economy, including the fair and effective taxation of multinational companies [change recommended by Jon Date, Action Aid].
Timescales for submissions
From Monday 16th November until Monday 23rd November we invited comments and feedback on the draft terms of reference. We invited full submissions in the above formats until Thursday 21st January 2015.