Watson Buckle Blog |
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Tax intermediaries' role recognised
Bring out the flags and bunting! Last year's OECD report on tax intermediaries gave us a very welcome thumbs up, concluding – no surprise to us – that we play a vital role in helping taxpayers to understand and meet their tax obligations.
Alas, every silver lining has its cloud. Revenue authorities don’t get off scot-free – they must be more commercially aware, impartial and open, the report says – but it also recommends risk assessments (already a reality for large UK businesses) for taxpayers and tax advisers, particularly those not too keen on going beyond their statutory obligations where disclosure and transparency are concerned.
And while it doesn’t clearly define the “unacceptable tax minimisation arrangements” that the revenue authorities dislike so much, the intention is very clearly to drive these out of town by introducing wide-ranging anti-avoidance rules, plus guidance where the law isn’t too clear.
With draft guidance on the new penalty regime focusing on taxpayers taking “reasonable care” in preparing tax returns – and on explaining what “reasonable care” actually is – plus increasingly complex tax systems and models, we can expect an increasing demand for compliance advice.
None of this is particularly ground-breaking. As professionals, governed by professional bodies, we’re well aware of our duty to advise clients on grey areas of taxation and disclosures. Money laundering legislation obliges us to let the authorities know if we suspect tax evasion or crime.
What the OECD report does do is provide a useful reminder of the need to keep proper records of advice given and be proactive in talking to the taxman if anything rings alarm bells.
Coming at this from a slightly different angle, areas considered in the judgement in the JD Wetherspoon case (Spc 657) included the ever-confusing boundary between plant and premises, along with expenditure incidental to the installation of plant.
It is in areas like this where we can contribute to “enhanced relationships” – through appropriate advice, disclosure and openness – in a brave new business tax world.
John Kinsella
Watson Buckle
www.watsonbuckle.co.uk