Rebecca Reading: Talking tax
|
Rebecca Reading, Baker Tilly
|
I WAS at an event recently where the majority of the audience were tax specialists, rather than finance or more general business people, and it occurred to me that a great deal of what was happening might be described as a kind of group therapy. Perhaps this is not that surprising; it is often the case that when those with a common interest get together, conversation becomes intense and there is a sense of camaraderie and a meeting of minds. But what might be the reasons for a collection of tax professionals to “bond”? Tax is hard! Tax has always been a technical subject, attracting those who like to get stuck into a big thick book of legislation, but that book just keeps getting bigger and bigger; in the late 1990s when I started in tax, the majority of the laws we needed to master were contained in two volumes, albeit with thin pages and small writing. Now we have five volumes and counting, plus a plethora of international material, OECD reports, EU cases and the like. It has been argued that the UK tax code is not really as long as it seems, if you take into account certain sections that are essentially duplicates, and repealed material no longer in force. However, it still takes time to find what you need and to rule out everything else. A good example of this is where a company presents me with a commercially-driven scenario, asking about the tax consequences, and I have to worry about whether they might be inadvertently caught by any anti-avoidance rules that, generally speaking, would never have been intended to apply. Tax is confusing! Aside from the inherent complexity caused by the number of rules, tax is often confusing at a conceptual or policy level; the difference in tax on a bonus versus a dividend is a well-known example of this, where the same pre-tax economic result can be achieved in two different ways with two different tax answers. More fundamentally, though, the recent public debate on taxation of multinationals has included criticism of tax payers who have benefited from tax breaks that have been introduced in accordance with the UK government policy to have the most competitive tax system in the G20. If a government introduces a new tax regime that allows a company to save tax if they spend money on research and development, why would a company not take that opportunity? It can feel like a lose-lose situation; I even came across a case recently where a business expressed a degree of concern that their effective tax rate might be too low, even though this was largely caused by the falling corporation tax rate. Tax is cash! Before the economic crisis, there was less sensitively around tax because there was more money around. Now, there is a great deal more pressure to manage tax like any other kind of cost, and it naturally falls on tax professionals to shoulder this burden alongside their clients or their organisations. More articles in
Sectors
CommentsIf you'd like to leave a comment, please register now for free or login
|
