But deliberate tax defaulters will be named
The Chancellor announced a series of measures to protect the tax system from abuse by challenging tax evasion and avoidance, but fell short of implementing any strict measures on tax havens, such as Bermuda or the Caymans, writes Angelique Ruzicka.
Alistair Darling said the measures would include publishing the names of deliberate tax defaulters, an offshore disclosure opportunity and targeted measures to stop tax avoidance.
Jeff Soar, senior manager of Ernst & Young said: “The tax disclosure regime requires advisers or companies coming up with innovative ideas to disclose them to the Revenue & Customs. At every Budget they go through the various disclosures and if they feel they are abusive they bring in measures to close loopholes.”
But he added: “There was nothing about tax havens in the Budget, which was a surprise as there were a lot of discussions around them during the G20 summit. It focused more on individuals storing money offshore.”
Lloyd’s insurers, however, were granted clarification on the taxation of foreign dividends when the Chancellor confirmed that foreign dividends received by large and medium groups would be exempt.
Peter Vipond, the ABI’s director of taxation, said the exemption should help build the UK’s battered reputation as a modern base for financial service firms. “It is good news that will be adapted in July this year. We now we need an early completion of the review of controlled foreign companies’ rules,” he said.
The taxation of foreign profits is a key area for insurers; the UK insurance industry pays the third highest amount of corporation tax of any sector, at £2.9bn.
Two insurance firms have recently relocated after expressing concerns about the tax competitiveness of the UK. Earlier this year Brit Insurance moved its headquarters to the Netherlands and Beazley left for the Republic of Ireland.