If Alistair Darling is to signal a u-turn on the foreign profits rules, he's going to have to do better than this:

Clearly, we want to look at how these reforms might affect individual sectors, including those dealing with intellectual property. We are committed to a revenue-neutral package that enhances competitiveness while protecting UK tax revenues.

That's a 'Treasury source' quoted by The Times.

Ever since the review began, we've known it would be 'revenue-neutral'. There's nothing new there - the principle being that the Treasury loses money from exempting inbound dividends, and gains from the CFC rules-tightening.

It's how he does the latter that is causing the problems. It will be interesting to see what new ideas might emerge from the Treasury, but as yet, there seems no sign of any climbdown (nor, in fact, a realisation on the part of the government that it had 'climbed' anywhere - it was still insisting very recently that everyone had just 'misunderstood').

May 20, 2008 | Permalink | Comments (0)

This is very good. Mark Hoban, the shadow parliamentary secretary to the Treasury, has dug out the Treasury's figures for staff illness caused by stress.

It shows an intriguing trend.

Here are the figures:

Jan - 198 working days lost to stress-related illness
Feb - 163
Mar - 155
Apr - 123
May - 168
Jun - 192
Jul - 131
Aug - 129
Sept - 84
Oct - 121
Nov - 85
Dec - 89

As James Kirkup of the Telegraph notes, 'that suggests a significant decline in stress at HMT since the middle of last summer.'

Just as, of course, our new chancellor took over. I always thought Alistair Darling was a nicer chap than Gordon.

May 20, 2008 | Permalink | Comments (0)

I think Mike Devereux of the Oxford Centre for Business Taxation has posed the policy dilemma on the foreign profits move quite well.

In last week's Economist, he says: 'The more successful tax collectors are in preventing firms from shifting profit out of Britain, the more they are likely to encourage firms to leave the country.'

That just about sums up the futility of the government's policy.

May 14, 2008 | Permalink | Comments (0)

I thought Joel Walters' interview in the CIOT/ATT journal Tax Adviser was interesting not only for what he said, but also for the fact that it was him saying it.

Walters is, for those who don't know, the group head of tax at Vodafone, and he makes the point that he thinks there is not as much 'tax avoidance' going on, there just seems to be because where disagreements between companies and HMRC do arise, they involve huge sums of money.

He should know, of course: Vodafone has been involved, and is still involved, in tax cases involving mind-boggling sums. The £2bn case over the Luxembourg subsidiary used during the Mannesman merger deal is the most interesting, to my mind. (Read the court documents here).

But what's more interesting is the rise and rise of the tax director. The group head of tax at a multi-national is no longer the tax geek who knows how to fill in tax returns or understands the whizzy tax schemes. They have become the point man in the increasingly important debate about tax and corporate social responsibility.

I'm sure I'm not alone in finding Walters' views on tax avoidance fascinating, and intrinsically quite plausible too, on some levels, though I also feel I don't entirely have the information to judge how 'rare' tax avoidance is among multi-nationals. Perhaps it feels rare to tax directors, and rife to the layman?

My point is that Walters is not the only person putting their head above the parapet. Not only are tax directors all on the important committee hammering out the new foreign profits rules, catching everyone's attention at present, but we are finding they are also increasingly prepared to meet with us and talk to journalists generally. I know who more of them are and could tell you the names of a dozen or so tax directors at UK-based multi-nationals, something I couldn't have done a year ago.

If the interest in tax avoidance, as the Guardian/Tesco affair suggests, continues to grow in interest and importance, the tax directors will need to be more visible to explain what is going on in a complex area that is also of key public concern.

May 7, 2008 | Permalink | Comments (0)