An article in The Guardian by Simon Bowers reports that ‘the island should be ready to become independent, says senior minister after political attacks on finance industry.’
The full article can be found at The Guardian here, or can be read below:
A barrage of regulatory clampdowns and political attacks on the Channel Islands’ controversial financial industry has prompted one of Jersey’s most senior politicians to call for preparations to be made to break the “thrall of Whitehall” and declare independence from the UK.
Sir Philip Bailhache, the island’s assistant chief minister, said: “I feel that we get a raw deal. I feel it’s not fair … I think that the duty of Jersey politicians now is to try to explain what the island is doing and not to take things lying down.
“The island should be prepared to stand up for itself and should be ready to become independent if it were necessary in Jersey’s interest to do so.” Continue Reading
UK Tax Budget 2012 – The Association of Taxation Technicians has produced a Special Report on the March Budget in their April 2012 Newsletter. The full Report is detailed below:
The contents of George Osborne’s third Budget were so well rehearsed that the real thing threatened to be an anti-climax. Was there anything left that the Chancellor could surprise us with, especially as he had such little fiscal room for manoeuvre?
The answer was both yes and no. After all the income tax rumours, Mr Osborne decided to make the change to 45% from April 2013. His 2013/14 increase in the personal allowance allowed him to start phasing out the age allowance – an unexpected revenue-raising ploy.
Income tax bands, rates and personal allowances All income tax rates for 2012/13 will remain at their 2011/12 levels. For 2013/14 the personal allowance will rise from £8,105 to £9,205 and there will be a £2,125 reduction in the basic rate limit from £34,370 to £32,245.
From 2013/14, there will be no increase in the age-related personal allowances and their availability will be restricted to people born before 6 April 1948 for the allowance worth £10,500, and 6 April 1938 for the allowance worth £10,660. The aim is to phase out the age-related allowances within a few years. For 2013/14 the additional rate of tax will be reduced from 50% to 45% (from 42.5% to 37.5% for dividends). The rates of tax for trusts will be similarly reduced.
A cap on unlimited income tax reliefs will apply to income tax reliefs that individuals will be able to claim from 6 April 2013. The cap will apply only to reliefs that are currently unlimited – e.g. qualifying interest payments. For anyone seeking to claim more than £50,000 in reliefs, a cap will be set at 25% of income (or £50,000, whichever is greater). Continue Reading
The UK and London will remain the world’s leading international and Islamic financial centres, said British Ambassador Iain Lindsay at a UK roundtable discussion at the WIBC.
‘Islamic finance, like every other type of financial activity, benefits from the UK’s combination of experience, variety of skills, geographic location, infrastructure, transparency and openness,’ he said.’ The UK recognises the tremendous opportunities that Islamic financial services have to offer. Continue Reading
According to Andrew Goodall, at the Tax Journal, the UK’s corporate tax competitiveness ‘appears to have finally turned a corner’, KMPG said as it summarised the findings of a survey of 50 large businesses operating in the UK.
In 2009 only 17% of respondents said the UK had ‘the most competitive tax system compared to key competitors’ but the corresponding figure in this year’s survey was 27%, the firm said. Continue Reading
The UK government has agreed measures with Switzerland to tackle offshore tax evasion. Under the terms of an agreement, existing funds held by UK taxpayers in Switzerland will be subject to a significant one-off deduction of between 19% and 34% to settle past tax liabilities. Continue Reading
Home or Away – UK Statutory Residence Test
HM Treasury has published a Consultative Document on the possible statutory definition of residence. A further document was issued on the same day regarding proposals to reform taxation of non-UK domiciled residents. The proposed new Statutory Residence Test classifies migrant individuals as “arrivers” (those who have recently come to the UK), “leavers” (who have recently left the UK) or “full time workers abroad”. Continue Reading
As reported in the OECD page, average tax and social security burdens on employment incomes fell slightly in 24 out of 30 OECD countries last year as governments struggled to shore up faltering economies amid the worst recession in decades. But whether this trend will continue this year is uncertain given the widespread pressures on public budgets.
The OECD and the Council of Europe have agreed on an update to an international treaty that aims to help governments enforce their tax laws, as part of the worldwide drive to combat cross-border tax evasion.
The update takes the form of a protocol amending the Convention on Mutual Administrative Assistance in Tax Matters for which the two multilateral organisations are the custodians. Its effect is to align the convention to the international standard on information exchange for tax purposes by allowing for the exchange of bank information.
The Protocol will be opened for signature on the occasion of the OECD’s annual Ministerial Meeting in Paris on 27-28 May. This initiative responds to a call by G20 leaders at their April 2009 summit for proposals as to ways to help developing countries secure the benefits of the new cooperative tax environment. U.K. Prime Minister Gordon Brown, as chair of the G20, indicated that “it would be helpful, in this regard, if an effective multilateral mechanism could be developed”.
The original convention entered into force in 1995. It currently groups 14 countries — Azerbaijan, Belgium, Denmark, Finland, France, Iceland, Italy, Netherlands, Norway, Poland, Sweden, United Kingdom, United States, and Ukraine – with Canada, Germany and Spain having signed it but not yet ratified it. Other OECD and Council of Europe members, including some that are G20 countries, are looking at becoming parties to the convention, and it is now being opened up to other countries that are not members of either the OECD or the Council of Europe members .
This will enable developing countries to become parties to the amended convention and benefit from the new, more transparent tax-cooperation environment. The protocol provides, among other things, for exchange of information, multilateral simultaneous tax examinations, service of documents and cross-border assistance in tax collection, while respecting national sovereignty and the rights of taxpayers and ensuring extensive safeguards to protect the confidentiality of the information exchanged.
OECD Secretary-General Angel Gurría and Council of Europe Secretary-General Thorbjørn Jagland welcomed the finalisation of the protocol by both organizations, noting that as more countries join, the benefits of the convention grow.
“Given its multilateral nature, the Convention is a unique instrument to counteract international tax avoidance and evasion,” Angel Gurría commented. “The OECD and the Council of Europe have agreed to improve international cooperation to combat tax evasion and the standards set by the convention are being updated to reflect this new consensus.”
“New provisions aim to remove obstacles to effective co-operation and exchange of information, especially those related to bank secrecy legislations,” said Thorbjørn Jagland. “The amending protocol also provides for the opening of the convention to countries that are not members of the Council of Europe or the OECD, thereby transforming it into an instrument to fight tax evasion worldwide.”