Creating tax transparency in the UK: introduction

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For more than a decade I, and many others, have been campaigning for tax transparency around the world, and most especially in tax havens.

We have campaigned for country-by-country reporting and whilst we have not got it yet, it is on its way for tax, and public reporting seems to be an almost inevitable follow on.

We are moving rapidly towards a situation where we will soon have significant extension to automatic information exchange from tax havens and between other countries. What was once just a pipe dream will soon be commonplace.

And we are getting more international tax cooperation from the OECD downwards.

But, surprisingly, there is an aspect of tax transparency which requires a lot more attention, and that is tax transparency in the UK. If I am honest this is an area which has been overlooked during the period when there was almost total opacity offshore and in many multinational companies. But as we begin to make some progress on these international issues the time has come to look at what can be done to improve tax transparency here in this country.

This is no small task; there is a lot to do, all if which can be entirely achieved within the UK. Over the next two or three weeks I will address a whole range of issues to create an agenda for change for tax transparency here in the UK, for which reason it is appropriate to note, first of all, just what I think tax transparency is.

Tax transparency is about at least five issues. The first is the obligation on the taxpayer to supply their tax authority with the information they need to tax them appropriately.

The second is that in some cases (those where artificial structures such as companies, LLPs and trusts are used) the taxpayer should supply sufficient information to all potential stakeholders to show that the use they have made use of the privileges granted to them by society is appropriate.

Thirdly, this is about tax advisers being transparent in their dealings.

Fourthly, this is about the information a taxpayer needs to enable them to estimate the tax that they owe being readily available to them.

And lastly, tax transparency is about a government being accountable for the use it makes of the funds it raises.

Of these five objectives there is usually little chance from public data to assess the first of these issues, since there is an accepted right of privacy in the UK, at least with regard to the tax affairs of most individuals (and there are exceptions: HMRC, for example, publicise the affairs of some taxpayers who have been penalised by them).

The second concern will be the focus of much of what I will write in this series.

The third is an issue of increasing concern as more tax arrangements fail and taxpayers find they have been sold inappropriate advice.

The fourth issue is a matter of real concern; taxpayers must have the information they need to ensure they can pay their tax in the right place, at the right rate and at the right time.

The last issue is far too often ignored when it comes to tax justice and yet has always seemed to me to be of considerable significance. We cannot demand transparency of taxpayers without government reciprocating.

The discussion will be framed by these concerns, unless comments made expand its range.

The issues I will address will not necessarily be in the above order though. I admit I'd find that restrictive. This series is about creating ideas, and I need the freedom to roam.