A round up of other news this week.
Finance Bill 2018-19 has been continuing its progress through parliament. At the Public Bill Committee sessions of 4 and 6 December 2018, considerable ground was covered. The remaining clauses (i.e. those not already debated in the Committee of the Whole House) from 32 to 67 and schedules 13 to 17 were agreed without amendment. These include clauses relating to oil activities, stamp taxes and VAT. Meetings of the Committee will be brought to a conclusion at the last scheduled session on 11 December. The Finance Bill will then return to the House of Commons for the Report Stage and Third Reading but dates have not yet been published for these.
The 2018 edition of the OECD’s annual publication titled ‘Revenue Statistics’ has been issued. It shows that the OECD average tax-to-GDP ratio rose slightly in 2017, to 34.2 percent, compared to 34 percent in 2016. The OECD average is now higher than at any previous point. An increase in tax-to-GDP levels was seen in 19 of the 34 OECD countries that provided preliminary data for 2017 with rates reaching higher levels than their pre-crisis levels in 21 countries. Consumption Tax Trends 2018 has also been published and highlights that VAT revenues continued to be the largest source of consumption tax revenues in the OECD, and have now reached an all-time high of 6.8 percent of GDP, representing 20.2 percent of total tax revenue, on average in 2016. After the upward trend in VAT rates following the economic crisis, standard rates stabilised at 19.3 percent on average in 2014 and have remained at this level since. Ten countries now have a standard VAT rate above 22 percent.
The Economic Affairs Committee published its report on ‘HMRC Powers: Treating Taxpayers Fairly’; the second report from the Finance Bill Sub-Committee’s inquiry into the Finance Bill 2018-19. The report concludes that recent powers provided to HMRC undermine the rule of law and hinder taxpayers’ access to justice. The Committee calls for the oversight of HMRC and its powers to be reviewed.
The CBI has published a paper looking at the co-operative compliance relationship between HMRC and large business. The paper, In Need of a Reset, looks at the current position and then recommends three main areas for improvement. These recommendations include using the ongoing Business Risk Review pilot to ensure the right incentives are in place, improvements to the Customer Compliance Manager (CCM) regime, and publication of annual metrics on HMRC's co-operative compliance performance.
Consumers are being warned to be on guard in the run up to Christmas as the number of large value fraud cases involving fake goods reaching court continues to rise, according to data from the KPMG Fraud Barometer.
KPMG’s Restructuring practice is seeing a flurry of enquiries from organisations who are looking to take action to mitigate a significant ‘working capital crunch’ that may result from Brexit ‘no deal’.