UK Treasury Exchequer David Gauke has taken part in a live question-and-answer session on the website of the Institute of Chartered Accountants, in which the Government official reflected on the difficulties of defining “aggressive” tax avoidance, discussed training for HM Revenue and Customs advisors, and expressed opposition to corporation tax devolution for Scotland.
Responding to a questioner who noted that a company had recently volunteered to pay extra tax in order to avoid public disapproval of apparent tax avoidance (presumably a reference to Starbucks), Gauke explained that “it’s not always possible to make an assessment over whether a company has been aggressive in its tax planning just by looking at raw numbers. Not all of the debate is as informed as it might have been.”
However, he also reiterated that Government was committed to countering “aggressive” tax avoidance, and that “where there is behaviour that is very aggressive, contrived, artificial, clearly contrary to wishes of Parliament – that behaviour is not right.” He drew attention to the introduction of the General Anti-Avoidance Rule and the closure of 33 loopholes since the last election, and to the UK Government’s commitment to the issue internationally at the G7, G8, and G20.
Gauke also stated that the Treasury was “delivering” on highly-qualified HMRC staff, and that HMRC’s graduate programme had been “substantially expanded.”
Gauke was also asked whether Scotland might become an “accidental tax haven” following devolution. Gauke took the view that two different tax systems would create “considerable complexity” and would be “an additional burden on businesses,” and he warned that devolved corporation tax “would not be good for business nor for the Exchequers of either Scotland or the rest of the UK.”
Prime minister David Cameron has recently come under criticism in Northern Ireland for postponing any decision about corporation tax devolution there until after the Scottish referendum in 2014.
Gauke was also asked about tax and SMEs. He noted the recent corporation tax cut to 20 percent and the reduced employment allowance, which he stated “is going to benefit small business in particular.” He added that the Government has also extended small business rate relief, and that the Government is “doing more to reduce the regulatory burden on smaller businesses.”