The public debate on tax avoidance is leading to tangible changes, not only in legislation, but also potentially in public sector procurement policy. Our clients are taking practical steps to address the challenges this brings. We invite you to contribute your perspectives to help us identify themes to take the debate forward with Government.
The management of the UK tax system, as part of the globalised economy, and the contribution of large corporations to the UK Exchequer, is the subject of significant debate. Given the wider economic conditions, we expect the debate to continue and for it to lead to some real changes both in terms of regulation and taxpayer behaviour. We have started to see some of these changes already and others will undoubtedly follow.
For the UK economy to thrive and for business to play its role in this success, it needs a tax system that aims to provide certainty, stability and confidence in the rule of law. Consensus is developing that a review of the international framework underpinning the business environment is necessary and we are currently gathering views from UK business leaders to put forward practical policy suggestions to help facilitate changes that support the success of UK business. In an increasingly global and knowledge-driven economy, we believe it is important for changes to be made that do not affect UK growth or competitiveness adversely. We’re keen to hear your views on this so please contact us if you would like to contribute to the thinking in this area.
In response to these conditions there are a number of activities that companies may wish to consider undertaking at either at Board level or across the organisation. We believe companies need a responsible approach to tax management which delivers sustainable outcomes in an uncertain environment. This requires a review of their current strategy and policy, should they both exist; making necessary changes to align their current arrangements with the updated preferred strategy and policy; and providing greater reassurance and communication to others in relation to their tax affairs:
Companies are assessing what the changing environment means for their business and reviewing their strategic approach to tax and the associated policy framework to ensure it remains fit for purpose. This may mean avoiding short-term gains that could expose the group to longer-term damage, and typically involves:
The review will, for some companies, result in changes to their tax strategy. The key challenge is that changes potentially affect not only the tax team and the corporate centre, but often the whole business, its operations and supporting systems, which may require a complex change management programme.
Some companies are considering how to provide greater reassurance to stakeholders that their taxes are being managed appropriately. They need to communicate their tax positions clearly. This could range from re-considering tax information in financial statements; adopting a communication strategy; or a more extensive review of global activities.
As mentioned earlier, if you would like to share your views on where tax policy should be heading to help us shape the debate, please don’t hesitate to contact us.
|Major changes in international tax reform and transparency
Download the guidance paper
|How to build a sustainable tax strategy
Download the guidance paper.