Tighter offshore trust and tax regulation in budget says RSM
By Tom Carnegie, 14 Nov 17
A potentially misconceived public perception of offshore trusts and tax law is putting pressure on chancellor Philip Hammond to further tighten regulations in the upcoming UK budget, according to experts from consulting firm RSM.
Andrew Hubbard, tax consultant at RSM, speaking on the Paradise Papers, said while the leaks show very little wrongdoing by clients, they have been framed in a way that reinforces a central public narrative.
This narrative is that the ultra wealthy and large international corporations are indulging in dubious tax activity on a wide scale.
Hubbard said this narrative is not correct, highlighting the fact that the top one per cent of those who hold UK’s wealth pay approximately 27% of annual income tax to HMRC.
Additionally, Hubbard said government figures show only £1.7bn of the 2015 to 2016 UK £34bn tax gap was due to avoidance, while £3.3bn was due to error.
Nevertheless, Hubbard said because of the public outcry from the Paradise papers chancellor Hammond will be under pressure to respond to the “feeding frenzy which has blown up about tax avoidance and secrecy”.
He speculated the response may be an announcement about requiring companies to publish their tax returns or at the very least to publish the country by country information that they already are required to provide the HMRC.
RSM said it did not expect new rules to come into effect immediately but expected some moves in this direction, perhaps via a consultation document.