Code of practice for Banks - Mazars - United Kingdom
Code of practice for Banks
On 29 June, the Government published a consultation document on a new code of practice on the taxation of banks.
The document sets out the Treasury's expectations of the banking sector and its aim to clamp down on tax avoidance and loopholes. In the document, the Treasury inform us they will be "speaking to banks to develop a shared understanding of where we expect them to draw the line" and makes it clear that banks should:
- adopt adequate governance to control the types of transactions they enter into;
- not undertake tax planning that aims to achieve a tax result that is contrary to the intentions of Parliament;
- comply fully with all their tax obligations; and
- maintain a transparent relationship with HM Revenue & Customs (HMRC)
The Treasury invites comments and feedback on the document until 25 September 2009.
Following feedback, the Treasury will consider the issues raised and subject to Ministerial agreement, plan to publish the final text of the Code in the autumn.
Comments are welcomed on the following topics:
- what issues are likely to arise in introducing and complying with the Code, and how these issues could be overcome;
- how uncertainties about tax issues could be resolved under the Code;
- what support banks should expect from HMRC to help them implement and abide by the Code;
- the approach to be taken on enforcement of the Code; and,
- how to implement the Code without undermining taxpayer confidentiality.
In his foreword to the consultation document, the Financial Secretary to the Treasury, Stephen Timms MP, said "Tax avoidance damages the ability of the tax system to deliver its objectives, imposes significant costs on society, undermines public confidence in the tax system and shifts a greater burden of tax onto compliant taxpayers."
"Banks play a vital role in the UK; they are important contributors of tax. Banks, like other businesses, will want to arrange their tax affairs efficiently. However, it is clear that some banks have been involved in tax avoidance that goes well beyond reasonable tax planning. HMRC will continue to challenge this behaviour."
"This consultation is a starting point in changing the behaviour of banks in relation to tax avoidance."
The document can be found here.
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