A Labour MP’s private members’ bill designed to combat tax evasion and avoidance by introducing greater transparency in the tax affairs of the UK’s wealthiest companies and individuals had its second reading in the House of Commons on Friday say Harris & Co chartered accountants Northampton who specialise in accountancy services for small businesses and are specialist small business accountants.
Discussion of the bill on 6 September attracted accusations of filibustering by coalition MPs, who strongly opposed its provisions, and time ran out before the debate could be concluded. It will now resume on 1 November 2013.
Labour MP Michael Meacher’s UK Corporate and Individual Tax and Financial Transparency Bill would require UK multinational companies to publicly release their tax returns, as well as the top 250 wealthiest individuals and companies.
Meacher says his bill is designed to raise tens of billions of pounds for the exchequer and would tackle the secrecy shielding the tax affairs of large companies and wealthy individuals.
However, his proposals have attracted strong criticism both within and outside Parliament. During the debate on Friday, Conservative MP Jacob Rees-Mogg described the bill as an assault on ‘a right we all enjoy as British subjects, the right to privacy in our financial affairs’. He also attacked elements of the bill that call for punitive sanctions against companies and individuals that fail to comply with its provisions.
The UK200Group of independent accountancy and law firms was equally scathing in its comments, stating that:
Mr Meacher is living in cloud cuckoo land if he thinks his half-baked proposals will raise tens of billions for the exchequer.
Cormac Marum, former inspector of taxes, and head of tax advisory at UK200Group member firm Harwood Hutton described the proposals as ‘wholly misguided’, citing in particular the failure to distinguish between tax evasion and tax avoidance.
‘How does making public any person’s tax return going to tackle tax evasion? By definition, tax evaders either lie on their tax return or deliberately omit details from the tax return they send to HMRC. By making those returns public, how is the evasion going to be uncovered?’