Global accounting standards body itself in a tax bind in UK
PrintListen to this Article
The International Financial Reporting Standards Foundation, parent entity of the mighty International Accounting Standard Board, made a £460,000 (Rs 4.07 crore) provision last year for a potential tax settlement with Britain’s HM Revenue and Customs, in a case that could prove highly embarrassing for the standards-setting body.
In its Annual Report published earlier this month, the IFRS Foundation pointed to a £460,000 provision made for a tax settlement with the HMRC following a review begun by the UK tax authority of “all records for inward bound expatriate staff and general compliance with employment tax, i.e., income tax and national insurance obligations”.
Discussions are on though the Foundation has made, at HMRC’s request, a £24,000 (Rs. 21.25 lakh) ‘no liability, no prejudice’ payment, pending final demand. The Foundation is not elaborating.
Business Line understands the HMRC has been examining the work patterns of the Foundation’s employees, and its interpretations of regulations (including the UK’s agreements with other jurisdictions where the body has employees).Business Line believes that one issue that was under examination has been closed in the Foundation’s favour since the year-end, while another continues to be examined.
‘ EMBARRASSING’
“It could be about people who are considered by the HMRC to be subject to Pay as You Earn taxation,” speculates Mr Richard Murphy, director of UK-based Tax Research and an anti-tax avoidance campaigner. “It could be about a dispute over the taxation of benefits in kind, things considered a business expense but taxable according to HMRC.”
However, one thing Mr Murphy is certain of is the irony of the situation. “…Whatever else is said, the dispute is profoundly embarrassing for …the people who are meant to set the rules and are staffed by people who are terribly familiar with the Big Four accountancy firms, and have got all the access to all the advice that one might need.”
He argues that the fact the Foundation had put the amount down as an estimated liability, rather than a remote contingent liability “signified that they see it as a reasonable risk that they will have to pay.”
SYSTEMIC ISSUES
“To me this is indicative of their attitude towards risk and their role as a regulator…someone who has to be so careful has been so careless not to ensure they had covered every risk..”
As for HMRC, it has faced criticisms over the way it has negotiated tax settlements with some of Britain’s largest companies. Last year, the House of Commons’ Public Accounts Committee expressed its “serious concerns” about “systemic issues” about the Department’s settlement process where governance arrangements were “bypassed or overlooked until it was too late.”
While the National Audit Office recently described as “reasonable” the deals reached with five firms, including Vodafone and Goldman Sachs, it was critical of other aspects of the process, including exemption of specialists from final decisions. (The Hindu)
Category : International Business | Comments : 0 | Hits : 335
Chartered accountants from the UK and Canada might be allowed to practice in India on a reciprocal basis, with the apex body ICAI making the proposal to the Government. ICAI President Ranjeet Kumar Agarwal, on February 21, said the proposal will be implemented strictly on the reciprocal basis that chartered accountants (CAs) from India will also be allowed to practice in the United Kingdom and Canada. It will be the first time that overseas CAs will be allowed to practice in India. The pro...
The tax department is considering a proposal under which credit card holders will have to file a declaration with the issuer entity within a stipulated time, specifying the nature of expenses incurred in foreign currency for the purpose of TCS levy, sources said. The I-T department is in talks with the RBI and other stakeholders to firm up a mechanism for distinguishing whether the expense is towards medical/education which attract a 5 per cent TCS or for other purposes on which a 20 per cent...
Concerns have been raised about the applicability of Tax Collection at Source (TCS) to small transactions under the Liberalized Remittance Scheme (LRS) from July 1, 2023. To avoid any procedural ambiguity, it has been decided that any payments by an individual using their international Debit or Credit cards upto Rs 7 lakh per financial year will be excluded from the LRS limits and hence, will not attract any TCS. Existing beneficial TCS treatment for education and health payments will also co...
The ministry on May 16 notified the Foreign Exchange Management (Current Account Transactions) (Amendment) Rules, 2023, to include international credit card payments in the LRS. Any remittance beyond USD 2.5 lakh or its equivalent in foreign currency would require approval from the RBI. Earlier, the usage of international credit cards (ICCs) for making payments for fulfilling expenses during travel outside India was not included in the LRS limit. According to the notification, the Finance ...
Canada’s immigration minister Sean Fraser has announced Express Entry invitations to FSWP and CEC candidates will resume by “early July 2022” The vast majority of new Express Entry applications will be processed within the six-month service standard. According to IRCC, current Express Entry processing times range from seven months to in excess of 20 months. Summary of Canada's Immigration Levels Plan Each year, the federal department of Immigration, Refugees ...
Comments