As discussed by Pope and Waters (2016), “tax avoidance” is considered as the act of bending the rules and regulations of the tax system to gain the tax advantage which is not intended by the parliament (“House of Commons and House of Lords”). It has been often seen to go through “contrived, artificial transactions that serve little or no purpose other than to produce this advantage”. In most cases tax avoidance schemes are not effective and the individuals engaging in these schemes will be able to pay the tax more than they attempted to save. This is particularly evident as soon as “HM Revenue and Customs (HMRC) has successfully challenged them” (Fikhriah et al. 2014).
There are several “self-employed workers who have clobbered” with a tax hike which may be considered with the main reason for Chancellor not paying attention to the “retail giants engaged in large-scale”. In the U.K. all the retailers need to pay a corporation tax along with levying company profits at a rate of 20 percent. However, the tax produced is seen to be less than 7% of the total portion of the income in 2016. Some of the well-known companies avoiding tax has been identified with Vodafone which is identified as “global telecoms” giant with a profit of £1.6 billion last year but it paid “little or no corporation tax for years”. The U.S. coffee chain Starbucks has tried to “clean up its act after being at the centre of a huge row in 2012, when it was pilloried for paying next to no corporation tax here”. In the U.K. it claimed of making no profits due to expensive leases on some of its shops. Thomas Cook’s tax bill of £8 million was significantly less as it was just over “5 per cent of the £152 million” operating profit which a travelling agent makes in the U.K. Company such as Gap are not only seen to pay no corporation tax but its U.K. holding company has received a credit from the HMRC due to its declaration of the losses. The clothing firm been seen to be having 115 stores, employing up to 4,000 staff, however the company has made significant loss of “nearly £20 million last year after handing more than £12 million of royalty payments to another offshoot” which are seen to be based in the UK and Netherlands. The popular coffee brand Caffe Nero is identified with sales £274 million and has more than 600 stores in “Britain and Ireland”. Despite of such a high sales amount the company does not pay any tax claiming the this due to making consistent losses. Several secondary resources have suggested that in “May 2016, the parent company of Caffe Nero made an operating profit of more than £17 million”, however this soon got evaporated into £25 million loss followed with a deduction of the loan interests to several banks in the U.K (Frecknall-Hughes and Moizer 2015).
The various dimensions of the study aim to find the major companies which are involved in the incidence of tax avoidance. The scope of the research has been also able to include the different types of the relevant studies which will be able to state on the” effectiveness of UK government’s tax anti-avoidance strategy and measures”. The research will be mainly conducted with the use of secondary source of information.
The research aims to investigate the effectiveness of UK government’s tax anti-avoidance strategy and measures.
The main research purposes of the study are listed below as follows:
It has been observed that multinationals in the U.K. are seen to be avoiding more than £5.8bn corporate taxes by booking profits in the overseas entities. The various learnings of the study aim to know about the nature of the companies which has been seen to be involved in evading tax. The discourse of the study will be also able to identify and evaluate the existing anti-avoidance strategies which are implemented in the recent times by the government.
The research seeks to address the following research questions listed below:
In 2016, the U.K. government has seen to be introducing several number of tax transparency and anti-avoidance measures in the UK in response to the OECD’s final BEPS assessments and Panama Papers revelations. The main literature of the study has been studied with the types of the tax avoidance methods which are undertaken by the U.K. firms. Some of the main discussion in this section has been included with concepts such as “double taxation, debt load, tax havens, Transfer of residence (redomiciling) and Income Shifting” (Hasan et al. 2014).
Double Taxation (Branch Profit Tax)
“Double taxation” is identified as the act of levying of tax for two or more jurisdictions on the “same declared income” in case of the “income taxes, capital taxes and sales tax”. The double liability is seen to be mitigated in several ways. In some cases, the main jurisdiction for tax may “exempt foreign-source income from tax”. In various types of the other cases the taxation jurisdiction may “exempt foreign-source income from tax” this is done in case the tax had been paid in another jurisdiction, or above some benchmark to not include “tax haven jurisdictions”. The term double taxation also means “double taxation” for some income or activity. For instance, in some of the jurisdictions the corporate profits are taxed twice and once they are earned the profits are distributed to the shareholders. Under this classical system of tax, the host country is seen to tax the corporate profits twice at the company level. “Most countries do not tax remittances of the after-tax branch” profits to the non-residents. Henceforth, the branch entity is seen to avoid the economic double taxation (Lee 2017).
Debt load (Thin Capitalization)
The conceptualization of the “debt load refers” to the amount of “debt or leverage that a company is carrying on its books”. The total amount of debt carried by the firm can be seen in the balance sheet of the company, which is provided on a quarterly basis. It has been often observed that “debt financing of cross border transactions is often favourable” than the equity financing to the taxpayer. In various situations the dividend receipts may be preferable to the interest income. For instance, if the dividends are exempted from the tax and interest received is subject to a relatively high tax rate in the state of domicile (Badertscher et al. 2015). Thin capitalization is referred with the use of “excessive use of debt over equity capital”. This is done by hiding the equity capitalization with “excessive loans or artificial use” of the “interest-bearing debt instead” of the equity by shareholders with the primary motive to get benefit from the tax advantages. Several countries have thin capitalization rules which are associated to the loan capital provided by the non-resident lenders who are substantial shareholders of the domestic company. Several tax and non-tax advantages taken by the companies from the thin capitalization are seen with withholding the tax on interest which is often nil or lower than the dividend amount. In some of the other cases, debt “allows the repatriation of capital invested as loan repayment” without considering the consequences (Emmanuel Guindon et al. 2014).
Some of the various types of the thin capitalization approaches taken by the countries in the worldwide may be categorized with firms providing debt funds to an unrelated party. Specific provisions under the tax regimes allows the interest on loan to be reclassified as “constructive dividend”. This is mainly seen to be applicable for the lender and borrower of the related persons.
Tax Havens
Tax havens are considered as the jurisdictions which tends to bear low or nil tax. These jurisdictions are also seen to be having several other benefits such as “financial secrecy, minimum reporting requirement, ring fencing, discretionary tax privileges, allowing ownership to be held in the trust, no registry of companies and partnerships, no taxes on dividends and interest payment to the non-residents”. Such regulations of the Tax haven countries allow for the firms to transfer their incomes in these regions. The “financial secrecy” permits for the foreign individuals to hide assets or income to avoid or minimize taxes in their home jurisdiction. It has been further identified that in several cases, “Secrecy jurisdiction is sometimes used as an alternative to tax haven to emphasise the secrecy element, and a Financial Secrecy Index ranks jurisdictions according to their size and secrecy”. The earnings from the income generated from the real estate are also eliminated in a similar manner (Annuar, Salihu and Obid 2014).
It has been further identified that earnings generated form the real estate by “renting property owned in an offshore jurisdiction” are often avoided by Tax Havens. The taxes paid in the tax haven jurisdiction has been already paid in a lesser tax rate jurisdiction. Some of the taxes such as “inheritance tax on the real estate, VAT on the initial purchase price of the real estate, or transfer tax, annual immovable property taxes, and municipal real estate taxes” may not be always avoided as these are “levied by the country” where the property is situated and hence the taxes need to be paid just the same as any other “resident of that country”.
As stated by Evertsson (2016) in various situations the corporate entities or the individuals are often seen to for the establishment of “shell subsidiaries” or move themselves in regions with reduced or no “taxation relative” to the international taxation. This creates a tax competition among the jurisdictions. In addition to this, different jurisdictions may be havens for the different types of the taxes and various categories of companies. The “Sovereign jurisdictions or self-governing territories under international law” are depicted with the power for taking the relevant actions with the tax laws affecting their territories, unless it is seen to be limited by the previous international treaties (Huang et al. 2016).
Transfer of residence
Residence transfer is seen as one form of “tax avoidance” practice in certain residence. In some of the jurisdictions the “jurisdictions with the worldwide tax regime”, the tax payers when they become non-resident are no longer liable to pay tax on the foreign source of income. In various cases the gains on the “movable property accrued” in a certain period residence realized but not realized at the time departure also escape the taxation. Several countries are seen to have enacted with the SAARs to prevent the tax avoidance through emigration. These examples are seen to be related to the countries such as the “U.K., U.S., Australia and Canada” (Drake, Lusch and Stekelberg 2017). The Transfer of the corporate residence may be requiring the companies to wound up or deemed as liquidated in the various types of the civil legal jurisdictions. In addition to this, certain countries are seen to impose the exit tax in situation the companies subject to the capital gain on the deemed sale.
Income Shifting
In the international supply chains, it has been often seen that multinationals “ship goods and services whose unit value, are decided by the MNC itself”. These are seen to be biased by the various types of the tax considerations. In case both the firms are seen to be owned by the same MNC then there is possibility of shifting the after-tax income from a country where the tax income invoice is high to low. In several cases there may be many shipments made annually in context “exporter and importer” are same MNC which can decide on the invoice value depending on the “tax differential between the import and export nations” (Graham et al. 2014). The direct conduits are seen with deriving the dividends interests and royalties which are sourced from another state so, the entities in the third state receiving the dividends and interest and royalties is depicted to be in a better position. In case the companies are seen to setup another source of income and receive the dividend in a more tax beneficial way then the income will be paid directly in between the states. A stepping conduit is seen with the with the states to establish the tax on income which is seen to be derived from another state of lesser tax invoice. There have been several treaties which are seen to be prepared with the treaties relating to hybrid entities. The individuals have the option to switch between the tax options to a country with lesser tax (McGuire, Wang and Wilson 2014).
Research Strategy
The research strategy has been seen in from of the implementation of deductive research technique. It has been further identified that the application of this strategy is appropriate for addressing the research questions. The main emphasis of the deductive research approach has been conducive in finding the results as per the research questions. The deductive research method of has been further identified with the motive to avoid the overall risk of the project. The main evaluation has been considered with the different types of the qualitative results generated from the secondary sources. The evaluation of the qualitative research aspect has been particularly seen to be considered with the application of the different type of the methods which are based on the documents of the U.K. government emphasizing on the legislation for the anti-tax avoidance and evaluating the effectiveness of the same (Leung 2015).
The feasibility of the research study has been taken into consideration with the effectiveness of the data extracted from the documents published by the government on anti-tax avoidance strategies. Some of the main source of the research evaluation will be taken into consideration with the UK contribution in tackling the tax avoidance and evasion as per the report published by Independent Commission of Aid Impact. Some of the other sources of the secondary source of the data has been seen to be included with the assessment “UK Government’s policy on tax avoidance since the Budget 2008”. Lastly, the approach of the research has been considered with the tackling the tax avoidance strategies as prescribed by HM Revenue & Customs (Henry, Massel and Towery 2016).
Research Approach
The strategy of the research has been selected with the qualitative research study based on secondary sources. This approach will be conducive in addressing the different types of the issue in the tax regime in the UK and state on the effectiveness of the various types of the reforms which has been implemented by the Government. The various types of the research approach have shown previous findings for the effectiveness of the government regimes and linked the literature review selected for this research paper (One et al. 2015).
Data collection Method
The collection of the secondary source of the data has been considered with journal, research articles and books associated to tax avoidance. The important topics sourced for the research paper has been based on the different types of the discussion which are seen to be considered as per the findings of these research studies (Grossoehme 2014).
Data Analysis Method
The interpretation of the research will be followed with the application of the thematic analysis. Thematic analysis aims to find the patterns across data sets which are seen to be particularly important for addressing the phenomenon associated to the specific research questions. The analysis has been further bale to employ variety of approaches rather than following a single method. It needs to be further understood that the “different versions of thematic analysis are underpinned by different philosophical and conceptual assumptions and are divergent in terms of procedure” (Peters and Halcomb 2015). As per the depictions made with this method the research will be able to support assertions with data from “grounded theory”. This work is designed to construct “theories that are grounded in the data themselves. This is reflective in thematic analysis because the process”. The main process of the thematic analysis will consist of “reading transcripts, identifying possible themes, comparing and contrasting themes, and building theoretical models” (Leavy and Gilgun 2014).
As discussed by Reay (2014), the overall result evaluated from the thematic technique will be able to evaluate the human experience in a subjective manner. The different aspects of the research study will be further able to emphasize on the participants’ “perceptions, feelings and experiences as the paramount object of study”. The occurrence of the process of data analysis is mainly seen with deductive research method. In addition to this the selected themes of the topic have been seen to be related with the UK government’s tax anti-avoidance strategy and measures (Fusch and Ness 2015). This theme selected for the study has been considered as a semantic theme. The rationale for the prediction of this theme as a semantic theme has been seen to be based on the identification of the explicit and surface meanings of the data. The outcome of the data is depicted with the label that is given to specific aspect of the data which contributes to the selected theme (Khan, Srinivasan and Tan 2017).
Validity and Reliability
The validity and the reliability of the research has been ensured with the selection of the appropriate research papers from the relevant sources. Some of the main source of the information has been guaranteed with the consideration of the information taken from the research journals published by the Government of U.K (Creswell 2014).
Double Taxation Treaty Abuse
The double taxation in the U.K. has been seen with the prevention of the income being taxed twice in the differing countries. The main interpretations of the study have been seen to be obvious with the abuser of the double tax treaties to secure the non-tax treaties. In addition to this, the “proposal made in the 2008” budget is at a standstill in conjunction with the artificial diversion of income from a resident of the UK to a foreign partner using complex structures which has resulted from the claim which the income which fell out from the taxation regime of the U.K. This strategy has been further seen to be appropriate as per the anti-tax avoidance measures. This is seen to be announced with the “strategic measures for consultation and potential legislation in the financial bill 2012”. Some of the main form of the improvement has been seen to be taken into consideration with the treaties and contributions to the pension schemes in the non-cash form. In addition to this, the government is seen to consult on extending the hallmarks which describes the avoidance of the schemes required to be disclosed to the HMRC (Lanis and Richardson 2014).
The Government has taken several types of the measures to include the consultation and potential legislation in the “Financial Bill 2012”. Some of the main improvements made by the government has been considered with the improving the strategic defence which aims to address the specific factors for the risk avoidance. The three measures introduced by the government in the finance bill 2011 is seen to include Stamp Duty Land Tax avoidance and the measures which are related to the avoidance of tax in the corporate sector (Lanis and Richardson 2015).
Debt load (Thin Capitalization)
The main interpretation of this concept is based on the existing firms of the U.K. This is evident with the case of Caffe Nero. Despite of such a high sales amount the company does not pay any tax claiming the this due to making consistent losses. Several secondary resources have suggested that in May 2016, the parent company of “Caffe Nero” made an operating profit of more than £17 million, however this soon got evaporated into £25 million loss followed with a deduction of the loan interests to several banks in the U.K. It is understood that “loading up with debt is a common way to cut tax”. The coffee chain’s “ultimate parent company is incorporated in the tax haven of Luxembourg. Its boss, private equity baron Gerry Ford, 59, holds controlling stakes through two firms based in the tax-friendly Isle of Man”. Similarly, Vodafone UK is identified as the global giant for making profit of £1.6 billion globally in 2016. However, it has been known to pay little or no corporation tax for several years (O’Connell 2014). This aspect is surprising considering it has “500 High Street stores, more than 18 million customers and billions of pounds worth of UK sales”. Moreover, the company has handed over exorbitant sums to the “Blair government for 3G licences and set aside those costs and other investments against its earnings here”. Company such as Gap are not only seen to pay no corporation tax but its U.K. holding company has received a credit from the HMRC due to its declaration of the losses. The clothing firm been seen to be having “115 stores, employing up to 4,000 staff”, however the company has made significant loss of “nearly £20 million last year after handing more than £12 million of royalty payments to another offshoot” which are seen to be based in the UK and Netherlands (Ting 2014).
Tax Havens strategy
The first strategy of the G20 has been seen to be orchestrated against the actions for tax havens. The main aim of the G20 is discerned with taking the appropriate actions against the non-cooperative jurisdiction for the tax havens. It is also ready to deploy the authorizations to defend the public finance and the financial systems. It also intends to protect the public finances and “international standards against the risks posed by the non-cooperative jurisdictions”.
In some of the territories the practical implications were seen to be effective in nature. The Cayman Islands has been subject to imposition of the new taxes as a condition for allowing it to stave off the “financial crisis” and the Turks and Calcos islands are subject to the direct rule due to the local corruption scandal. The implementation of the policy appeared to move closer in 2009. Firstly, the news from the Isle of Man has suggested that “UK is seeking to claw back between” 50 million pounds and 100 million pounds which has been estimated to be 230-million-pound subsidy. The result of tax haven was introduced in the OECD standard of the 12 tax information exchange agreements. The critics has been further able to pint on the 200 jurisdictions in the world and the standard of proof is required to make information exchange request (Lee 2015).
There have been several fundamental concerns of the tax havens which has not been addressed appropriately. The banking secrecy in several areas are seen to be contributing to the trade practices. The filing of the accounts in the recent reports has been able to state that the right regulations are in place and they have been able to ensure that the customers can avoid these practices. The growing form of the momentum has been identified with a significant domestic and international effort to avoid the various instances of tax evasion. It has been further seen to be important for the international community and national government for preventing any instance of redundancy or hardship faced during the period in which the territories were restructured with the economic activity. In addition to this, the transitions were seen to be lacking “process of dialogue between national governments, multilateral agencies, territory governments, businesses and unions” (Sikka 2015).
Some of the other discussions has been seen with the advances made in the recent developments made by the “Crown Dependencies” in terms of the progress made with the transparency which has been able to give the adequate support to limit the tax avoidances instances. The government has been able to ensure that the tax system to be effective it is important to that meeting the tax transparency. There has been several number of the jurisdictions which has been able to state on the room for complacency. The various types of the technical assistance have been seen with the implementation of the different types of the regulation which has been seen to be related to the financial regulations and “competitor jurisdictions to raise their standards”. In number of jurisdictions there has been no room for complacency. The Eu has been seen to be particularly strong in terms of offshoring the activities through the “Code of Conduct on Business Taxation and the Savings Tax Directive– such a move would seem fully justified” (Winata 2014).
HM Revenue & Customs’ (HMRC’s) DOTA
The HM Revenue & Customs’ (HMRC’s) have stated that the expected tax gap difference £5 billion was due to tax avoidance in the expected tax gap of 2010-11 which was £32 billion in total. The working definition of the HMRC’s tax avoidance is identified with using the “tax law to get a tax advantage that Parliament never intended”. The strategy to prevent, detect counteract avoidance with disclosure regime, known as “DOTAS (Disclosure of Tax Avoidance Schemes)”. This regime is considered with selling certain types of tax avoidance scheme. Some of the most evident issues had been identified in terms of the taxpayers who have used the scheme to record the tax return. In the initial stages there had been two types of the schemes which the HMRC has reported to be having high risk. Since then DOTAS have been able to expand their business across more taxes and more types of avoidance (Saputra 2017).
The effectiveness of the DOTA regime
The various types of the findings and analysis on the DOTA regime has been able to state that DOTA has assisted the HMRC to recommend changes to tax law and prevent some types of avoidance activity. The DOTA has allowed HMRC for informing about the legislation to close legal ‘loopholes’ and more quickly and recommend the main changes to the tax law and ensure smooth operations of the marketing schemes. The introduction of DOTAS has been seen to initiate 93 changes to the tax law design to reduce the avoidance.
In addition to this, there continues to be an active market of tax avoidance schemes, although there has been a major change in the shape of the market. In more than “100 new avoidance schemes disclosed under DOTAS in each of the last four years”, there has been several instances off variations on the promoter’s response to the changes pertaining to the tax law. “There is no evidence that such schemes are seen to be reducing”. Most of the tax practitioner have reduced the opportunities for avoidance of tax in the larger areas. Most schemes are seen to be promoted by the small specialist tax advisers and business model which relies on helping the clients who avoid paying tax. The analysis of DOTAS disclosure since 2004 have been able to state on the market changes.
It has been further seen that the HMRC has been unable to enforce compliance with DOTAS with the promoters determining to avoid the disclosure. In most cases, the promoters are seen to be complying with “DOTAS”. Despite of this, the minority has been seen to be avoiding a scheme to perceive an advantage in doing so. In addition to this, the government is considering to strengthen the “DOTAS” and include the HMRC powers to enforce the compliance. This is seen to be done by consulting on expanding the information which the promoters are required to disclose under the “DOTAS” and how it may be changed to raise the hurdle for reasonable excuse. There have been several ways where the HMRC has been depicted with an active role in avoidance activity other than through “DOTAS”. HMRC is seen to use to detect the avoidance activity which falls outside the rules of DOTA and should be disclosed. It has been seen to assign relationship manager to the largest business and wealthiest individuals. Some of the other findings have been able to reveal that “HMRC has not yet found an effective deterrent to prevent promoters from marketing aggressive schemes”. The HMRC has been able to increase its focus on the tax affairs of high net worth and affluent individuals. HMRC has been seen to be opening 41000 avoidance cases which was used to market schemes use by the small business and individuals.
It is yet to demonstrate whether there is any successful implementation to reduce this number. The HMRC is further able to monitor the progress of the projects for investigating similar cases. The large number of the users related to marketing schemes are seen to pose a major threat to HMRC. HMRC has estimated 30,000 users of the partnership loss schemes and employment of the intermediary schemes. It has aimed to litigate some of the leading cases to demonstrate other users will not succeed in applying the rulings to other cases. The tribunal rules have been further able to bind the rulings in lead cases. Some of the other investigations led by the HMRC investigation has used the avoidance schemes and HMRC has been seen to be using anti-avoidance strategy which has bee not yet identified with the evaluation of the effectiveness. The anti-avoidance has not yet been identified with evaluating the effectiveness. The anti-avoidance strategy by HMRC was seen to include the actions which the HMRC considers to be most effective at combating. The overall strategy is yet to seen with the evaluation of the HMRC is considering with the evaluation of the overall effectiveness. The HMRC has not seen to be monitoring the cost of the work in tackling avoidance.
Interpretation on the effectiveness of Tax Havens strategy
The main form of the effectiveness of the Tax Havens strategy is seen to be based on the effectiveness of deterring the counter tax avoidance and ensure that the rules would work fairly and does not erode the UK tax regime’s attractiveness to the business. The tax treatments need to ensure that increasing the resources to reduce the cost for HMRC to an acceptable level is followed with a minimal need of diverting from the priorities.
Interpretation on Double Taxation Treaty Abuse
The budget has also allowed to make the relevant improvement to the tax legislations in areas like capital allowance. It has been further seen that the use of the double taxation is seen to be taken intio consideration with the pension schemes in non-cash form. The improvement in the double taxation treaties and contribution to the pension schemes in non-cash form. The introduction of the Finance Bill in 2011 increased the receipts by around £4 billion over the course of this Parliament.
Findings on Debt Load
The DFID’s capacity building program on the international tax have been conducive in addressing some of the most fundamental issues in tax avoidance and evasion. It has been further observed that DFID reforms has suggested several agendas to address the number of important issues pertaining to the DFID’s partner countries. The DFID is seen to be lacking a solid evidence on the working of the international tax issues which affect the developing countries. DFID has been seen to support the research on tax and the developmental activities performed at the University of Sussex by contributing £3.5 million (2010-16). There has been little evidence drawn from the DFID tax team drawing on the available research along with setting the priorities across the UK. There has been limited knowledge available in terms of informing the international agencies in influencing activities of central programmes on tax.
Conclusion and Recommendations
The different types of the findings of the research has been able to state that the Double Taxation Treaty Abuse is seen with the prevention of the income being taxed twice in the differing countries. The main interpretations of the study have been seen to be obvious with the abuser of the double tax treaties to secure the non-tax treaties. In addition to this, the “proposal made in the 2008 budget” had stopped the artificial diversion of income from a resident of the UK to a foreign partner using complex structures which has resulted from the claim which the income which fell out from the taxation regime of the U.K. This strategy has been further seen to be appropriate as per the anti-tax avoidance measure. The effectiveness of the interpretation on the effectiveness of Tax Havens strategy is seen to be based on the effectiveness of deterring the counter tax avoidance and ensure that the rules would work fairly and does not erode the UK tax regime’s attractiveness to the business. The tax treatments need to ensure that increasing the resources to reduce the cost for HMRC to an acceptable level is followed with a minimal need of diverting from the priorities.
The HM Revenue & Customs’ (HMRC’s) have stated that the expected tax gap difference £5 billion was due to tax avoidance in the expected tax gap of 2010-11 which was £32 billion in total. The working definition of the HMRC’s tax avoidance is identified with using the “tax law to get a tax advantage that Parliament never intended”. The strategy to prevent, detect counteract avoidance with disclosure regime, known as “DOTAS (Disclosure of Tax Avoidance Schemes)”.
Some of the other findings on the debt load has stated that this is evident with Caffe Nero. Several secondary resources have suggested that in May 2016, the parent company of Caffe Nero made an operating profit of more than £17 million, however this soon got evaporated into £25 million loss followed with a deduction of the loan interests to several banks in the U.K. It has been understood that “loading up with debt is a common way to cut tax”.
The overall depictions have been able to state that DFID has been able to position itself well the advantage and opportunity presented by the G20 tax reform agenda. It has been further able to make an effective use of the limited advisory resources and combine the influencing activities and aid programmes in complimentary ways. To tackle the issues of tax avoidance the minimum rate of the tax needs to be paid on the income of those individuals who earn more than “£100,000 a year to ensure that they do not unduly benefit from tax reliefs and allowances that society cannot afford to provide to them”. It has been further seen to be recommended that the new statutory basis needs to be created for determining the count of the number of days they spend in the UK each year. In most cases, the ordinary people will be able to determine the residence status as per the simple on line set of the questions and answers. Any rule to include the anti-avoidance rules needs to be considered fairly for the obstacles before it can be considered with the non-residents. There should be appropriate reform made on the rules on company residence so that the artificial relocation of the company’s control to the UK “tax net becomes considerably harder to achieve”. There should be an introduction of the robust controlled foreign companies which are seen to be “transferring the ownership” of the intellectual property into tax havens. There is significant scope for the for improvement needs to be considered with the introduction of “general anti-avoidance principle, or GAntiP, that treats all tax avoidance as unacceptable”.
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