# data[].attributes.attachment_link.readable_text
The £360 billion retail property sector has joined calls for the government to urgently overhaul the business rates system.

Revo, which represents hundreds of retailers, high street landlords and consultants, has written to the Treasury asking it to accelerate the "fundamantal" review of business rates promised at the Queen's Speech in December.

It has proposed a series of reforms to the tax, which is based on "rateable values" linked with shop rents and has been blamed by retailers and landlords for the growing number of high street closures.

The business rates tax has risen from 34 per cent to 50 per cent of rateable values since 1990, making it one of the highest corporate taxes in the world. About a quarter of business

# data[].attributes.attachment_link.title
Retailers demand digital sales tax in bid to save high street

# data[].attributes.attachment_link.description
The £360 billion retail property sector has joined calls for the government to urgently overhaul the business rates system. Revo, which represents hundreds of retailers, high street landlords and consultants, has written to the Treasury asking it to accelerate the "fundamantal" review of business rates promised at the Queen's Speech in December.

# data[].attributes.attachment_link.readable_text
The £360 billion retail property sector has joined calls for the government to urgently overhaul the business rates system.

Revo, which represents hundreds of retailers, high street landlords and consultants, has written to the Treasury asking it to accelerate the "fundamantal" review of business rates promised at the Queen's Speech in December.

It has proposed a series of reforms to the tax, which is based on "rateable values" linked with shop rents and has been blamed by retailers and landlords for the growing number of high street closures.

The business rates tax has risen from 34 per cent to 50 per cent of rateable values since 1990, making it one of the highest corporate taxes in the world. About a quarter of business

# data[].attributes.attachment_link.title
Retailers demand digital sales tax in bid to save high street

# data[].attributes.attachment_link.description
The £360 billion retail property sector has joined calls for the government to urgently overhaul the business rates system. Revo, which represents hundreds of retailers, high street landlords and consultants, has written to the Treasury asking it to accelerate the "fundamantal" review of business rates promised at the Queen's Speech in December.

# data[].attributes.attachment_link.readable_text
The £360 billion retail property sector has joined calls for the government to urgently overhaul the business rates system.

Revo, which represents hundreds of retailers, high street landlords and consultants, has written to the Treasury asking it to accelerate the "fundamantal" review of business rates promised at the Queen's Speech in December.

It has proposed a series of reforms to the tax, which is based on "rateable values" linked with shop rents and has been blamed by retailers and landlords for the growing number of high street closures.

The business rates tax has risen from 34 per cent to 50 per cent of rateable values since 1990, making it one of the highest corporate taxes in the world. About a quarter of business

# data[].attributes.attachment_link.title
Retailers demand digital sales tax in bid to save high street

# data[].attributes.attachment_link.description
The £360 billion retail property sector has joined calls for the government to urgently overhaul the business rates system. Revo, which represents hundreds of retailers, high street landlords and consultants, has written to the Treasury asking it to accelerate the "fundamantal" review of business rates promised at the Queen's Speech in December.

# data[].attributes.attachment_link.readable_text
The £360 billion retail property sector has joined calls for the government to urgently overhaul the business rates system.

Revo, which represents hundreds of retailers, high street landlords and consultants, has written to the Treasury asking it to accelerate the "fundamantal" review of business rates promised at the Queen's Speech in December.

It has proposed a series of reforms to the tax, which is based on "rateable values" linked with shop rents and has been blamed by retailers and landlords for the growing number of high street closures.

The business rates tax has risen from 34 per cent to 50 per cent of rateable values since 1990, making it one of the highest corporate taxes in the world. About a quarter of business

# data[].attributes.attachment_link.title
Retailers demand digital sales tax in bid to save high street

# data[].attributes.attachment_link.description
The £360 billion retail property sector has joined calls for the government to urgently overhaul the business rates system. Revo, which represents hundreds of retailers, high street landlords and consultants, has written to the Treasury asking it to accelerate the "fundamantal" review of business rates promised at the Queen's Speech in December.

# data[].attributes.attachment_link.readable_text
The £360 billion retail property sector has joined calls for the government to urgently overhaul the business rates system.

Revo, which represents hundreds of retailers, high street landlords and consultants, has written to the Treasury asking it to accelerate the "fundamantal" review of business rates promised at the Queen's Speech in December.

It has proposed a series of reforms to the tax, which is based on "rateable values" linked with shop rents and has been blamed by retailers and landlords for the growing number of high street closures.

The business rates tax has risen from 34 per cent to 50 per cent of rateable values since 1990, making it one of the highest corporate taxes in the world. About a quarter of business

# data[].attributes.attachment_link.title
Retailers demand digital sales tax in bid to save high street

# data[].attributes.attachment_link.description
The £360 billion retail property sector has joined calls for the government to urgently overhaul the business rates system. Revo, which represents hundreds of retailers, high street landlords and consultants, has written to the Treasury asking it to accelerate the "fundamantal" review of business rates promised at the Queen's Speech in December.

# data[].attributes.attachment_link.readable_text
The £360 billion retail property sector has joined calls for the government to urgently overhaul the business rates system.

Revo, which represents hundreds of retailers, high street landlords and consultants, has written to the Treasury asking it to accelerate the "fundamantal" review of business rates promised at the Queen's Speech in December.

It has proposed a series of reforms to the tax, which is based on "rateable values" linked with shop rents and has been blamed by retailers and landlords for the growing number of high street closures.

The business rates tax has risen from 34 per cent to 50 per cent of rateable values since 1990, making it one of the highest corporate taxes in the world. About a quarter of business

# data[].attributes.attachment_link.title
Retailers demand digital sales tax in bid to save high street

# data[].attributes.attachment_link.description
The £360 billion retail property sector has joined calls for the government to urgently overhaul the business rates system. Revo, which represents hundreds of retailers, high street landlords and consultants, has written to the Treasury asking it to accelerate the "fundamantal" review of business rates promised at the Queen's Speech in December.

# data[].attributes.attachment_link.readable_text
The £360 billion retail property sector has joined calls for the government to urgently overhaul the business rates system.

Revo, which represents hundreds of retailers, high street landlords and consultants, has written to the Treasury asking it to accelerate the "fundamantal" review of business rates promised at the Queen's Speech in December.

It has proposed a series of reforms to the tax, which is based on "rateable values" linked with shop rents and has been blamed by retailers and landlords for the growing number of high street closures.

The business rates tax has risen from 34 per cent to 50 per cent of rateable values since 1990, making it one of the highest corporate taxes in the world. About a quarter of business

# data[].attributes.attachment_link.title
Retailers demand digital sales tax in bid to save high street

# data[].attributes.attachment_link.description
The £360 billion retail property sector has joined calls for the government to urgently overhaul the business rates system. Revo, which represents hundreds of retailers, high street landlords and consultants, has written to the Treasury asking it to accelerate the "fundamantal" review of business rates promised at the Queen's Speech in December.

# data[].attributes.attachment_link.readable_text
The £360 billion retail property sector has joined calls for the government to urgently overhaul the business rates system.

Revo, which represents hundreds of retailers, high street landlords and consultants, has written to the Treasury asking it to accelerate the "fundamantal" review of business rates promised at the Queen's Speech in December.

It has proposed a series of reforms to the tax, which is based on "rateable values" linked with shop rents and has been blamed by retailers and landlords for the growing number of high street closures.

The business rates tax has risen from 34 per cent to 50 per cent of rateable values since 1990, making it one of the highest corporate taxes in the world. About a quarter of business

# data[].attributes.attachment_link.title
Retailers demand digital sales tax in bid to save high street

# data[].attributes.attachment_link.description
The £360 billion retail property sector has joined calls for the government to urgently overhaul the business rates system. Revo, which represents hundreds of retailers, high street landlords and consultants, has written to the Treasury asking it to accelerate the "fundamantal" review of business rates promised at the Queen's Speech in December.

# data[].attributes.attachment_link.readable_text
The European Union has added the Cayman Islands, a UK overseas territory, to its tax havens blacklist.

It joins Oman, Fiji and Vanuatu, which have also been accused of failing to crack down on tax abuse.

Oxfam, which lobbies for tax reform, said the EU's move was "encouraging" but many more places should be blacklisted.

As well as the Cayman Islands, additions this year include Panama, Palau and the Seychelles.

The EU said the Cayman Islands, which has no income tax, capital gains tax or corporation tax, does not have "appropriate measures" in place to prevent tax abuse, allowing firms to register there despite having minimal presence in the territory.

The jurisdiction was previously on a ''grey list'' that gave it time to introduce new laws to tackle tax deficiencies. But it did not implement the "economic substance" reforms by the deadline as promised, the EU said.

Cayman Islands' Premier, Alden McLaughlin, said the government has approved many reforms sought by the EU and has already contacted the EU about the process of being removed from the blacklist.

A lobby group for the Cayman financial services industry said it is hopeful a reversal will happen in the "not too distant future".

The Cayman Islands is the first UK territory to be added to the EU blacklist.

Blacklisted countries face difficulties accessing EU funding programmes, while European companies doing business in those jurisdictions have to take additional compliance measures.

The list, which the EU started in 2017 to put pressure on countries to crack down on tax havens and unfair competition, included 15 countries in 2018 but has shrunk.

Officials said that Turkey, which is currently on the "grey" list, would not be moved to the blacklist despite concerns about its information sharing with some EU member states.

Oxfam, which has campaigned on tax, said other British territories, such as the British Virgin Islands, deserve to be added to the list, as do some places within the EU.

"While it is encouraging that the Cayman Islands has finally been added to the blacklist, the list itself still proves wholly inadequate," the organisation said.

"The EU needs to strengthen its blacklisting criteria, put its own house in order and push for an ambitious and effective minimum tax rate at global level."

# data[].attributes.attachment_link.title
EU puts Cayman Islands on tax haven blacklist

# data[].attributes.attachment_link.description
The European Union has added the Cayman Islands, a UK overseas territory, to its tax havens blacklist. It joins Oman, Fiji and Vanuatu, which have also been accused of failing to crack down on tax abuse. Oxfam, which lobbies for tax reform, said the EU's move was "encouraging" but many more places should be blacklisted.

# data[].attributes.attachment_link.readable_text
The European Union has added the Cayman Islands, a UK overseas territory, to its tax havens blacklist.

It joins Oman, Fiji and Vanuatu, which have also been accused of failing to crack down on tax abuse.

Oxfam, which lobbies for tax reform, said the EU's move was "encouraging" but many more places should be blacklisted.

As well as the Cayman Islands, additions this year include Panama, Palau and the Seychelles.

The EU said the Cayman Islands, which has no income tax, capital gains tax or corporation tax, does not have "appropriate measures" in place to prevent tax abuse, allowing firms to register there despite having minimal presence in the territory.

The jurisdiction was previously on a ''grey list'' that gave it time to introduce new laws to tackle tax deficiencies. But it did not implement the "economic substance" reforms by the deadline as promised, the EU said.

Cayman Islands' Premier, Alden McLaughlin, said the government has approved many reforms sought by the EU and has already contacted the EU about the process of being removed from the blacklist.

A lobby group for the Cayman financial services industry said it is hopeful a reversal will happen in the "not too distant future".

The Cayman Islands is the first UK territory to be added to the EU blacklist.

Blacklisted countries face difficulties accessing EU funding programmes, while European companies doing business in those jurisdictions have to take additional compliance measures.

The list, which the EU started in 2017 to put pressure on countries to crack down on tax havens and unfair competition, included 15 countries in 2018 but has shrunk.

Officials said that Turkey, which is currently on the "grey" list, would not be moved to the blacklist despite concerns about its information sharing with some EU member states.

Oxfam, which has campaigned on tax, said other British territories, such as the British Virgin Islands, deserve to be added to the list, as do some places within the EU.

"While it is encouraging that the Cayman Islands has finally been added to the blacklist, the list itself still proves wholly inadequate," the organisation said.

"The EU needs to strengthen its blacklisting criteria, put its own house in order and push for an ambitious and effective minimum tax rate at global level."

# data[].attributes.attachment_link.title
EU puts Cayman Islands on tax haven blacklist

# data[].attributes.attachment_link.description
The European Union has added the Cayman Islands, a UK overseas territory, to its tax havens blacklist. It joins Oman, Fiji and Vanuatu, which have also been accused of failing to crack down on tax abuse. Oxfam, which lobbies for tax reform, said the EU's move was "encouraging" but many more places should be blacklisted.

# data[].attributes.attachment_link.readable_text
The European Union has added the Cayman Islands, a UK overseas territory, to its tax havens blacklist.

It joins Oman, Fiji and Vanuatu, which have also been accused of failing to crack down on tax abuse.

Oxfam, which lobbies for tax reform, said the EU's move was "encouraging" but many more places should be blacklisted.

As well as the Cayman Islands, additions this year include Panama, Palau and the Seychelles.

The EU said the Cayman Islands, which has no income tax, capital gains tax or corporation tax, does not have "appropriate measures" in place to prevent tax abuse, allowing firms to register there despite having minimal presence in the territory.

The jurisdiction was previously on a ''grey list'' that gave it time to introduce new laws to tackle tax deficiencies. But it did not implement the "economic substance" reforms by the deadline as promised, the EU said.

Cayman Islands' Premier, Alden McLaughlin, said the government has approved many reforms sought by the EU and has already contacted the EU about the process of being removed from the blacklist.

A lobby group for the Cayman financial services industry said it is hopeful a reversal will happen in the "not too distant future".

The Cayman Islands is the first UK territory to be added to the EU blacklist.

Blacklisted countries face difficulties accessing EU funding programmes, while European companies doing business in those jurisdictions have to take additional compliance measures.

The list, which the EU started in 2017 to put pressure on countries to crack down on tax havens and unfair competition, included 15 countries in 2018 but has shrunk.

Officials said that Turkey, which is currently on the "grey" list, would not be moved to the blacklist despite concerns about its information sharing with some EU member states.

Oxfam, which has campaigned on tax, said other British territories, such as the British Virgin Islands, deserve to be added to the list, as do some places within the EU.

"While it is encouraging that the Cayman Islands has finally been added to the blacklist, the list itself still proves wholly inadequate," the organisation said.

"The EU needs to strengthen its blacklisting criteria, put its own house in order and push for an ambitious and effective minimum tax rate at global level."

# data[].attributes.attachment_link.title
EU puts Cayman Islands on tax haven blacklist

# data[].attributes.attachment_link.description
The European Union has added the Cayman Islands, a UK overseas territory, to its tax havens blacklist. It joins Oman, Fiji and Vanuatu, which have also been accused of failing to crack down on tax abuse. Oxfam, which lobbies for tax reform, said the EU's move was "encouraging" but many more places should be blacklisted.

# data[].attributes.attachment_link.readable_text
The European Union has added the Cayman Islands, a UK overseas territory, to its tax havens blacklist.

It joins Oman, Fiji and Vanuatu, which have also been accused of failing to crack down on tax abuse.

Oxfam, which lobbies for tax reform, said the EU's move was "encouraging" but many more places should be blacklisted.

As well as the Cayman Islands, additions this year include Panama, Palau and the Seychelles.

The EU said the Cayman Islands, which has no income tax, capital gains tax or corporation tax, does not have "appropriate measures" in place to prevent tax abuse, allowing firms to register there despite having minimal presence in the territory.

The jurisdiction was previously on a ''grey list'' that gave it time to introduce new laws to tackle tax deficiencies. But it did not implement the "economic substance" reforms by the deadline as promised, the EU said.

Cayman Islands' Premier, Alden McLaughlin, said the government has approved many reforms sought by the EU and has already contacted the EU about the process of being removed from the blacklist.

A lobby group for the Cayman financial services industry said it is hopeful a reversal will happen in the "not too distant future".

The Cayman Islands is the first UK territory to be added to the EU blacklist.

Blacklisted countries face difficulties accessing EU funding programmes, while European companies doing business in those jurisdictions have to take additional compliance measures.

The list, which the EU started in 2017 to put pressure on countries to crack down on tax havens and unfair competition, included 15 countries in 2018 but has shrunk.

Officials said that Turkey, which is currently on the "grey" list, would not be moved to the blacklist despite concerns about its information sharing with some EU member states.

Oxfam, which has campaigned on tax, said other British territories, such as the British Virgin Islands, deserve to be added to the list, as do some places within the EU.

"While it is encouraging that the Cayman Islands has finally been added to the blacklist, the list itself still proves wholly inadequate," the organisation said.

"The EU needs to strengthen its blacklisting criteria, put its own house in order and push for an ambitious and effective minimum tax rate at global level."

# data[].attributes.attachment_link.title
EU puts Cayman Islands on tax haven blacklist

# data[].attributes.attachment_link.description
The European Union has added the Cayman Islands, a UK overseas territory, to its tax havens blacklist. It joins Oman, Fiji and Vanuatu, which have also been accused of failing to crack down on tax abuse. Oxfam, which lobbies for tax reform, said the EU's move was "encouraging" but many more places should be blacklisted.

# data[].attributes.attachment_link.readable_text
The European Union has added the Cayman Islands, a UK overseas territory, to its tax havens blacklist.

It joins Oman, Fiji and Vanuatu, which have also been accused of failing to crack down on tax abuse.

Oxfam, which lobbies for tax reform, said the EU's move was "encouraging" but many more places should be blacklisted.

As well as the Cayman Islands, additions this year include Panama, Palau and the Seychelles.

The EU said the Cayman Islands, which has no income tax, capital gains tax or corporation tax, does not have "appropriate measures" in place to prevent tax abuse, allowing firms to register there despite having minimal presence in the territory.

The jurisdiction was previously on a ''grey list'' that gave it time to introduce new laws to tackle tax deficiencies. But it did not implement the "economic substance" reforms by the deadline as promised, the EU said.

Cayman Islands' Premier, Alden McLaughlin, said the government has approved many reforms sought by the EU and has already contacted the EU about the process of being removed from the blacklist.

A lobby group for the Cayman financial services industry said it is hopeful a reversal will happen in the "not too distant future".

The Cayman Islands is the first UK territory to be added to the EU blacklist.

Blacklisted countries face difficulties accessing EU funding programmes, while European companies doing business in those jurisdictions have to take additional compliance measures.

The list, which the EU started in 2017 to put pressure on countries to crack down on tax havens and unfair competition, included 15 countries in 2018 but has shrunk.

Officials said that Turkey, which is currently on the "grey" list, would not be moved to the blacklist despite concerns about its information sharing with some EU member states.

Oxfam, which has campaigned on tax, said other British territories, such as the British Virgin Islands, deserve to be added to the list, as do some places within the EU.

"While it is encouraging that the Cayman Islands has finally been added to the blacklist, the list itself still proves wholly inadequate," the organisation said.

"The EU needs to strengthen its blacklisting criteria, put its own house in order and push for an ambitious and effective minimum tax rate at global level."

# data[].attributes.attachment_link.title
EU puts Cayman Islands on tax haven blacklist

# data[].attributes.attachment_link.description
The European Union has added the Cayman Islands, a UK overseas territory, to its tax havens blacklist. It joins Oman, Fiji and Vanuatu, which have also been accused of failing to crack down on tax abuse. Oxfam, which lobbies for tax reform, said the EU's move was "encouraging" but many more places should be blacklisted.

# data[].attributes.attachment_link.readable_text
The European Union has added the Cayman Islands, a UK overseas territory, to its tax havens blacklist.

It joins Oman, Fiji and Vanuatu, which have also been accused of failing to crack down on tax abuse.

Oxfam, which lobbies for tax reform, said the EU's move was "encouraging" but many more places should be blacklisted.

As well as the Cayman Islands, additions this year include Panama, Palau and the Seychelles.

The EU said the Cayman Islands, which has no income tax, capital gains tax or corporation tax, does not have "appropriate measures" in place to prevent tax abuse, allowing firms to register there despite having minimal presence in the territory.

The jurisdiction was previously on a ''grey list'' that gave it time to introduce new laws to tackle tax deficiencies. But it did not implement the "economic substance" reforms by the deadline as promised, the EU said.

Cayman Islands' Premier, Alden McLaughlin, said the government has approved many reforms sought by the EU and has already contacted the EU about the process of being removed from the blacklist.

A lobby group for the Cayman financial services industry said it is hopeful a reversal will happen in the "not too distant future".

The Cayman Islands is the first UK territory to be added to the EU blacklist.

Blacklisted countries face difficulties accessing EU funding programmes, while European companies doing business in those jurisdictions have to take additional compliance measures.

The list, which the EU started in 2017 to put pressure on countries to crack down on tax havens and unfair competition, included 15 countries in 2018 but has shrunk.

Officials said that Turkey, which is currently on the "grey" list, would not be moved to the blacklist despite concerns about its information sharing with some EU member states.

Oxfam, which has campaigned on tax, said other British territories, such as the British Virgin Islands, deserve to be added to the list, as do some places within the EU.

"While it is encouraging that the Cayman Islands has finally been added to the blacklist, the list itself still proves wholly inadequate," the organisation said.

"The EU needs to strengthen its blacklisting criteria, put its own house in order and push for an ambitious and effective minimum tax rate at global level."

# data[].attributes.attachment_link.title
EU puts Cayman Islands on tax haven blacklist

# data[].attributes.attachment_link.description
The European Union has added the Cayman Islands, a UK overseas territory, to its tax havens blacklist. It joins Oman, Fiji and Vanuatu, which have also been accused of failing to crack down on tax abuse. Oxfam, which lobbies for tax reform, said the EU's move was "encouraging" but many more places should be blacklisted.

# data[].attributes.attachment_link.readable_text
The European Union has added the Cayman Islands, a UK overseas territory, to its tax havens blacklist.

It joins Oman, Fiji and Vanuatu, which have also been accused of failing to crack down on tax abuse.

Oxfam, which lobbies for tax reform, said the EU's move was "encouraging" but many more places should be blacklisted.

As well as the Cayman Islands, additions this year include Panama, Palau and the Seychelles.

The EU said the Cayman Islands, which has no income tax, capital gains tax or corporation tax, does not have "appropriate measures" in place to prevent tax abuse, allowing firms to register there despite having minimal presence in the territory.

The jurisdiction was previously on a ''grey list'' that gave it time to introduce new laws to tackle tax deficiencies. But it did not implement the "economic substance" reforms by the deadline as promised, the EU said.

Cayman Islands' Premier, Alden McLaughlin, said the government has approved many reforms sought by the EU and has already contacted the EU about the process of being removed from the blacklist.

A lobby group for the Cayman financial services industry said it is hopeful a reversal will happen in the "not too distant future".

The Cayman Islands is the first UK territory to be added to the EU blacklist.

Blacklisted countries face difficulties accessing EU funding programmes, while European companies doing business in those jurisdictions have to take additional compliance measures.

The list, which the EU started in 2017 to put pressure on countries to crack down on tax havens and unfair competition, included 15 countries in 2018 but has shrunk.

Officials said that Turkey, which is currently on the "grey" list, would not be moved to the blacklist despite concerns about its information sharing with some EU member states.

Oxfam, which has campaigned on tax, said other British territories, such as the British Virgin Islands, deserve to be added to the list, as do some places within the EU.

"While it is encouraging that the Cayman Islands has finally been added to the blacklist, the list itself still proves wholly inadequate," the organisation said.

"The EU needs to strengthen its blacklisting criteria, put its own house in order and push for an ambitious and effective minimum tax rate at global level."

# data[].attributes.attachment_link.title
EU puts Cayman Islands on tax haven blacklist

# data[].attributes.attachment_link.description
The European Union has added the Cayman Islands, a UK overseas territory, to its tax havens blacklist. It joins Oman, Fiji and Vanuatu, which have also been accused of failing to crack down on tax abuse. Oxfam, which lobbies for tax reform, said the EU's move was "encouraging" but many more places should be blacklisted.

# data[].attributes.attachment_link.readable_text
The European Union has added the Cayman Islands, a UK overseas territory, to its tax havens blacklist.

It joins Oman, Fiji and Vanuatu, which have also been accused of failing to crack down on tax abuse.

Oxfam, which lobbies for tax reform, said the EU's move was "encouraging" but many more places should be blacklisted.

As well as the Cayman Islands, additions this year include Panama, Palau and the Seychelles.

The EU said the Cayman Islands, which has no income tax, capital gains tax or corporation tax, does not have "appropriate measures" in place to prevent tax abuse, allowing firms to register there despite having minimal presence in the territory.

The jurisdiction was previously on a ''grey list'' that gave it time to introduce new laws to tackle tax deficiencies. But it did not implement the "economic substance" reforms by the deadline as promised, the EU said.

Cayman Islands' Premier, Alden McLaughlin, said the government has approved many reforms sought by the EU and has already contacted the EU about the process of being removed from the blacklist.

A lobby group for the Cayman financial services industry said it is hopeful a reversal will happen in the "not too distant future".

The Cayman Islands is the first UK territory to be added to the EU blacklist.

Blacklisted countries face difficulties accessing EU funding programmes, while European companies doing business in those jurisdictions have to take additional compliance measures.

The list, which the EU started in 2017 to put pressure on countries to crack down on tax havens and unfair competition, included 15 countries in 2018 but has shrunk.

Officials said that Turkey, which is currently on the "grey" list, would not be moved to the blacklist despite concerns about its information sharing with some EU member states.

Oxfam, which has campaigned on tax, said other British territories, such as the British Virgin Islands, deserve to be added to the list, as do some places within the EU.

"While it is encouraging that the Cayman Islands has finally been added to the blacklist, the list itself still proves wholly inadequate," the organisation said.

"The EU needs to strengthen its blacklisting criteria, put its own house in order and push for an ambitious and effective minimum tax rate at global level."

# data[].attributes.attachment_link.title
EU puts Cayman Islands on tax haven blacklist

# data[].attributes.attachment_link.description
The European Union has added the Cayman Islands, a UK overseas territory, to its tax havens blacklist. It joins Oman, Fiji and Vanuatu, which have also been accused of failing to crack down on tax abuse. Oxfam, which lobbies for tax reform, said the EU's move was "encouraging" but many more places should be blacklisted.

# data[].attributes.attachment_link.readable_text
Ministers could introduce a mansion tax on high-value properties (via Getty Images)

Should the Treasury consider a 'mansion tax' to help fund spending commitments?

Robert Palmer, director of Tax Justice UK, says YES

Do you know who pays more in council tax: me in my two-bedroom flat in Kentish Town, or the owner of the £160m penthouse at the top of 1 Hyde Park? Astonishingly, the answer is me.

Our current approach to taxing property is broken. In England, council tax is based on values from 1991. The amount people pay also varies hugely between councils. After a decade of cuts to local government, councils are struggling to fund basic services.

It's great to see leaks suggesting that the Conservatives might take on this problem by introducing a mansion tax on the most expensive properties or adding more bands at the top.

With council budgets under strain, it's only right that those living in the most expensive homes contribute a bit more. A well designed mansion tax would raise extra revenue, while protecting most people who haven't had a real pay rise in a decade. Even better would be to make council tax more directly linked to a property's value, as they are in the US.

Nickie Aiken, Conservative MP for Cities of London and Westminster, says NO

A "mansion tax" - a new tax on high value homes - is a tax on London. It would totally hammer families and elderly people who have worked hard for years to pay their mortgages, and who have already forked out additional tax such as stamp duty when they bought their homes.

Before we introduce more taxes, let's reform what we already have, such as the no-longer-fit-for-purpose council tax, where bands are based on property values last reviewed in 1991. Then, the value for a Band H property in Westminster stood at £300,000 - today you'd struggle to find a garage in the heart of my constituency for that.

There are some 2,000 properties in Westminster worth over £10m, and they can pay their fair share through council tax. I raised an additional £600,000 in just one year as Council leader by introducing voluntary community contributions for Band H occupants which funded rough sleeping projects and services for children and young people.

Let's use common sense and, rather than introducing new taxes, reform the broken council tax system first.

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DEBATE: Should the Treasury consider a 'mansion tax' to help fund spending commitments? - CityAM

# data[].attributes.attachment_link.description
Should the Treasury consider a 'mansion tax' to help fund spending commitments? Do you know who pays more in council tax: me in my two-bedroom flat in Kentish Town, or the owner of the £160m penthouse at the top of 1 Hyde Park? Astonishingly, the answer is me.

# data[].attributes.attachment_link.readable_text
Since late 2018, I have rented a room in a flat-share from a landlord who was known to me and asked for rent to be paid in cash, which I agreed to. I recently received a letter from HM Revenue & Customs, asking me about the tax status of my current landlord, which suggested I may have to withhold tax from my rental payments to ensure the correct amount is paid. Am I potentially liable if my current or previous landlord has not complied with HMRC and how should I respond to this letter?
Dawn Register, partner in tax dispute resolution at accountancy and business advisory firm BDO, says it sounds as if you have received a "nudge letter" from HM Revenue & Customs (HMRC). This is a batch letter sent to certain taxpayers as part of a HMRC campaign.

In this case, HMRC has identified and sent letters to tenants of properties owned by non-UK resident landlords. The letter reminds affected tenants of the rules under the Non-Resident Landlord (NRL) scheme. This is a new HMRC campaign. However, the NRL scheme dates back to April 1 1996.

You understood the letter correctly. If the landlord is non-UK resident and subject to the NRL scheme, you may need to deduct basic rate tax at 20 per cent from the rent. A non-resident landlord could be an individual, a company or trustees. Subject to exceptions, a tenant needs to deduct tax from the rent if the rent is not paid through a letting agent and more than £100 a week is paid to the overseas landlord or their UK representative, for example a friend or family member.

If the rent is paid to the letting agent - which in your case it is not - it is the letting agent's responsibility to withhold the tax due. What constitutes a letting agent is broad and depends on the particular arrangement. In our experience, the tenant's obligation to deduct basic rate tax is not widely known. The NRL scheme allows non-resident landlords to apply to HMRC to have their UK rent paid to them gross, but it is unlikely tenants will know whether this applies to them.

Tenants who are required to operate the NRL scheme must notify the Personal Tax International team at HMRC and account quarterly to HMRC Accounts Office, Shipley, for any tax due under the scheme. Where they are required to account for tax they should provide their non-resident landlords with a certificate of tax liability each year, plus complete an annual information return.

It may sound surprising but, where applicable, the withholding of tax from rent due to non-UK resident landlords is the tenant's responsibility. HMRC's manual, however, suggests that affected tenants "have the right to recover from the landlord any tax they have to pay under the scheme where they did not deduct it from their rent or other money owing".

It seems plausible that many tenants will not know the answers to certain details they are being asked to provide in respect of their landlord. The Chartered Institute of Taxation has advised recipients not to ignore such letters and I agree. Individuals receiving the letter should engage with HMRC and complete the questionnaire as best they can. If confused or unsure, specialist advice should be sought.

James Parratt, solicitor at Thomson Snell & Passmore, says this letter is part of HMRC's information gathering process to help them establish whether or not your landlord is a "non-resident landlord" - in other words, their usual place of abode is outside the UK. This is distinct from being a resident in the UK for tax purposes. A non-resident landlord can be an individual, company or trustees.

The non-resident landlord scheme requires income tax at the basic rate to be deducted from rental payments to the non-resident landlords of UK property. This tax is to be accounted to HMRC.

If your landlord is a non-resident, you are obliged to deduct tax from the rental payments you make to your landlord, and account for this to HMRC. If you pay more than £100 per week and your landlord lives abroad, you must register with HRMC and deduct tax from your rent, assuming you have not already been notified by HMRC of the scheme. Registration with HMRC may also be necessary if you pay rent to a UK representative of your landlord.

Do not worry - these deductions do not mean you are paying more; you are simply withholding the tax calculation from your landlord and accounting for this to HMRC instead.

While there is no obligation to respond to the letter and questionnaire, doing so will enable HMRC to help you if further action is required, or to tell you if no further action is required. If you do not respond, HMRC is likely to register the property for a tax charge and issue a tax determination to the landlord.

You are not obliged to inform your landlord that you have received the letter from HMRC. But if the tax authority determines that your landlord is a non-resident, you should inform your landlord that you are required to deduct tax from the rental payments.

The reduction in rent payable to your landlord will not affect your rights in respect of your tenancy agreement, nor give your landlord a new right to seek possession of their property. Your landlord will have no incentive to find another tenant as a new tenant will also be obliged to deduct tax from their rent payments if HMRC determines your landlord to be a non-resident landlord.

I suggest you engage with HMRC, completing the questions as far as possible, and do not ignore it. When responding, you should answer the questions to the best of your knowledge. HMRC suggests tenants should reply "not known" if they do not know the information for the specific questions.

You should not be overly concerned about any references to penalties in the letter. HMRC will not look to charge a penalty if mistakes have been made in the completion of the form attached to the letter. Penalties are only relevant where the tenant has chosen not to deduct tax at the right time or neglected to do so.

HMRC has a dedicated helpline to answer any queries you may have and this may also be of assistance when preparing your response to them. The number to call is 03000 516 644.

The opinions in this column are intended for general information purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors are not responsible for any direct or indirect result arising from any reliance placed on replies, including any loss, and exclude liability to the full extent.
Do you have a financial dilemma that you'd like FT Money's team of professional experts to look into? Email your problem in confidence to money@ft.com

Our next question

I wish to transfer my share portfolio to my daughter as I am retiring. Are there any tax implications to this I should be aware of? I will have a steady stream of income from my pension, so I won't need the money from my portfolio in my retirement. My daughter is keen to start investing, so I feel like this is the best way to get her started.

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Am I responsible for paying my landlord's tax bill?

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Since late 2018, I have rented a room in a flat-share from a landlord who was known to me and asked for rent to be paid in cash, which I agreed to.

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HMRC has banked £3.3bn from stamp duty receipts in the last three months of the year, in line with Q4 2018, despite refunding a record amount of overpayments.

In total, 314,700 transactions took place in Q4 of which 285,700 were home purchases. Stamp duty receipts for home purchases reached £2.3bn, also on a par with the previous year's quarterly takings.

However, 11,100 refunds valued at £155m were issued to buyers who had been charged the additional homes levy of three per cent for a buying a new home before selling their old property. If buyers sell their original main residence within three years of the purchase they can claim the stamp duty back. The three per cent additional homes tax was introduced in April 2016.

During previous quarters in the year, refund levels have not exceeded 6,500 transactions.

Just over £400m of stamp duty receipts were collected through the three per cent higher stamp duty rate in Q4.

John Shallcross, Stamp Duty Land Tax specialist at Blake Morgan, said: "A possible explanation for the spike in refunds is because the revenue has been catching up with its requests. They started hitting their 15-day target in October 2019, before that refunds had been taking a lot longer."

Shallcross said the HMRC said it was now processing 90 per cent of its refund claims within the target and had moved staff from different departments to get up to date with the back log.

Mortgage Solutions has contacted HMRC for comment.

Some 62,800 purchasers claimed first-time buyers' relief in the quarter, making a total of 464,700 claims since the relief's introduction in November 2017. The estimated total amount relieved over that period is £1.1bn.

First-time buyer's relief applies to purchases of homes for £500,000 or less provided the buyer has never owned a home before and it is their main residence. Homes valued at £300,000 or less carry no stamp duty liability. Transactions valued at more than £300,000 but less than £500,000 are subject to a five per cent tax charge.

Shaun Church, director at Private Finance, said: "Almost half a million first-time buyers have taken advantage of this tax break since introduction. With a stamp duty bill typically amounting to tens of thousands, many of these first-time buyers would have been unable to achieve their homeownership dream had it not been for this tax relief.

"With the Budget just around the corner, pressure will be mounting on the chancellor to turn his attention back to stamp duty, but this time for those further up the property ladder.

"The government desperately needs to start incentivising downsizing, the UK's older generations are stuck in homes that are too large for their needs, but too expensive to give up. Offering last-time buyers a stamp duty exemption on their new smaller home would encourage them to downsize, freeing up the 'forever' homes desperately sought after by younger families."

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HMRC issues record stamp duty refunds for second homes in Q4 - Mortgage Solutions

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HMRC has banked £3.3bn from stamp duty receipts in the last three months of the year, in line with Q4 2018, despite refunding a record amount of overpayments. In total, 314,700 transactions took place in Q4 of which 285,700 were home purchases.

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Digital tax reforms designed to reduce the number of errors made by self-employed people on their tax returns have failed, tax experts have warned.

The new system has also turned out to be vastly more expensive than businesses were led to believe.

Since April 2019, VAT-registered businesses and self-employed people with a turnover above the £85,000 VAT threshold have been forced to use specialist software when filing their returns to HM Revenue & Customs (HMRC).

These reforms, known as Making Tax Digital, were supposed to ensure that fewer mistakes were made by taxpayers.

However, a report by the Association of Taxation Technicians (ATT), a trade body, has warned that in 70pc of cases the digital system has not reduced errors. In some cases, using the new software has increased mistakes. The vast majority of firms have also incurred higher than expected costs.

Both the ATT and the Chartered Institute of Taxation have now jointly called for a comprehensive review into the digital reforms.

The costs of implementing the new digital requirements have also exceeded projections. HMRC stated that the average cost would be £109 for each affected business, but the ATT found that less than 10pc of businesses have paid this sum.

Almost half (45pc) of respondents said they paid between £109 and £500, with 12pc claiming implementation cost them more than £5,000.

In some instances, firms have had to pay for staff training to meet the new rules. More than half of firms have reported that productivity has declined as a result.

HMRC said that businesses would take time to adapt to the new regime. As a result, it is not imposing fines for late or incorrect filing in the first year after implementation.

A spokesman said: "Making Tax Digital for VAT is still in its first year and we completely understand that some businesses and their agents will need time to get used to the new system.

"We appreciate that while there are free products available, some businesses will have incurred software and training costs, but Making Tax Digital's enabling of digital records linked to HMRC's systems will help to free up valuable time."

The Government announced in March 2019 that it had halted the rollout of Making Tax Digital, and said that no other taxes would be enrolled in 2020.

Tina Riches, who chairs a tax industry working group, said: "Far from bringing benefits to businesses and the Exchequer, Making Tax Digital for VAT has so far created additional, costly obligations for most businesses beyond what was predicted by HMRC.

"The Government should undertake a detailed review of Making Tax Digital for VAT, and determine any benefits, before rolling out Making Tax Digital more widely."

Are you self-employed and have you been impacted by digital tax reforms? Let us know in the comments section below.

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Digital tax reforms have cost the self-employed thousands of pounds more than promised

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Digital tax reforms designed to reduce the number of errors made by self-employed people on their tax returns have failed, tax experts have warned. The new system has also turned out to be vastly more expensive than businesses were led to believe.

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The UK has been told to "hold fire" on a new tax on big technology firms planned for April.

The OECD said that there needs to be a global agreement on technology company tax.

Without such an agreement, there would be the risk of "a cacophony" with countries going their own way.

The warning came as France agreed to delay a new tax on multinational technology firms after an angry response from Washington.

The organisation charged with brokering a global compromise on an issue threatening a transatlantic trade war has said the UK should hold fire on its digital sales tax.

As the Chancellor of the Exchequer arrived at the World Economic Forum in Davos, the Organisation for Economic Cooperation and Development (OECD)'s Secretary General Angel Gurria told the BBC that without a global solution to technology companies paying less than a fair share of tax, there would be a "cacophony and a mess" of 40 countries going their own way with "tensions rising all over the place".

In regards to the UK plan to levy a 2% tax on the UK revenues of search engines, social media companies and online marketplaces from April, Gurria, said that the government should "absolutely hold fire and contribute to a multilateral solution".

Elsewhere at the World Economic Forum, there were indications that the French Government will delay its implementation of a tech tax to until the end of the year.

What is the digital sales tax?

The UK, France and several other European countries want to make sure that technology giants pay their "fair share" of tax in countries where they operate.

These governments are concerned that technology giants - the largest of which are US companies - are avoiding taxes in the European Union.

They argue taxes should be based on where digital activity takes place not where firms have their European headquarters.

Italy, Austria and Turkey are also considering imposing new levies.

Washington is opposed to the tax which it says unfairly targets US firms.

However, Chancellor Sajid Javid has on Wednesday said the UK would push ahead with its digital tax, which could generate revenues of £500m a year.

Mr Gurria is hosting a meeting between the French finance minister Bruno Le Maire and US Treasury Secretary Steve Mnuchin to confirm a ceasefire that should prevent a tit for tat trade war between the US and Europe.

But Mr Mnuchin, in an interview with the Wall Street Journal, warned other countries including the UK that "they'll find themselves faced with President Trump's tariffs. We'll be having similar conversations with them".

However, tech companies are queuing up to say the tax system should change.

Microsoft President Brad Smith told the BBC "it does make sense for big tech companies to pay appropriate taxes".

And Apple chief executive Tim Cook in Ireland on Tuesday backed the OECD's effort to find a global solution.

Officials preparing US-UK trade talks have expressed concern that the US would raise its objections to a UK digital sales tax in trade negotiations.

The Treasury said: "We've committed to introduce our Digital Services Tax from April 2020. It will be repealed once a global solution is in place".

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UK told to 'hold fire' on April tech tax

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The UK has been told to "hold fire" on a new tax on big technology firms planned for April. The OECD said that there needs to be a global agreement on technology company tax. Without such an agreement, there would be the risk of "a cacophony" with countries going their own way.

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People who are relocating or stuck in a chain when moving house could be caught out by changes to capital gains tax (CGT) coming into effect in April, experts have warned.

If they have already bought their next home, new rules will halve the amount of time homeowners have to sell their existing property - from 18 months to nine - before triggering a tax bill.

This will not leave enough time for everyone to sell, warned Nimesh Shah of Blick Rothenberg, a tax consultancy.

"Nine months is an incredibly short period," said Shah. "When the government consulted on this matter, many commented that the new rules should not be introduced and the current 18-month time frame was fit for purpose, but they pushed ahead

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Beware the nine-month capital gains tax trap

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People who are relocating or stuck in a chain when moving house could be caught out by changes to capital gains tax (CGT) coming into effect in April, experts have warned. If they have already bought their next home, new rules will halve the amount of time homeowners have to sell their existing property - from 18 months to nine - before triggering a tax bill.

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BEPS 8-10 is making a difference in the UK.

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BEPS 8-10 is making a difference in the UK.

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2015 saw the introduction of the diverted profits tax(DPT) which was designed to change behaviour and clamp down on contrived tax schemes used by the largest digital multinationals to avoid corporation tax as a result of their tax structures allowing for profits to be offshored rather than taxed in the country where their sales take place, while a tightening of transfer pricing rules put pressure on these global players.

HMRC said that 'the DPT has revolutionised our approach in countering contrived arrangements used by some multinational corporations to shift their profits offshore and avoid paying tax in the UK on their economic activities here'.

To the end of 2018/19 over £4.6bn in taxes had been paid. This included £2bn in VAT from businesses restructuring their operations, more than £2.2bn in corporation tax where the DPT helped settle existing investigations, and £369m net from DPT charging notices.

So far in 2019/20 HMRC has secured another £480m through DPT investigations. HMRC is currently carrying out around 100 investigations into multinationals with arrangements to divert profits. The total amount of tax under consideration was £2.9bn as at March 2019.

HMRC set up a profit diversion compliance facility to encourage businesses to stop diverting profits and pay outstanding tax. Around two thirds of the large businesses initially targeted have used the tax facility to bring their tax affairs up to date quickly, enabling HMRC to focus even more resources on investigating businesses which continue to divert profits.

The 2,000 largest and most complex businesses in the UK are responsible for around 40% of the country's tax receipts. In 2018/19 this was £251bn. This was nearly half thecountry's total tax take of £623.36bn in that tax year.

The total corporation tax bill by contrast was £54bn across all UK businesses, highlighting the impact of national insurance contributions (NICs) and VAT on corporate tax bills and subsequently their effective corporate tax rate.

Typically offshoring arrangements include avoiding a UK taxable presence by exploiting permanent establishment (PE) rules, and creating tax advantages by using transactions or connected entities that lack economic substance by inflating expenses and understating income.

HMRC has a programme of data profiling and research to identify companies that have features that suggest that they may be diverting profits from the UK and has written to businesses which has identified as potential profit diverters. It has also established a specialist compliance team, the profit diversion compliance facility, to focus resources on the worst offenders.

'We recognise some companies have been diligent in reviewing their transfer pricing policies. But some persist with contrived arrangements to divert profits so we're finding new ways to encourage them to change their behaviour,' HMRC said.

When investigating arrangements to divert profits HMRC considers relevant accounting periods before and after the diverted profits tax was introduced. Most of these investigations are resolved by the business agreeing to change its transfer pricing and pay additional corporation tax.

The diverted profits tax has forced companies to rethink their tax compliance and has raised £369m since it came into force.

Where HMRC believes that diverted profits tax may be due, a preliminary notice is issued. Depending on the company's response, HMRC may then issue a charging notice setting out the amount of diverted profits tax to be paid by the company within 30 days.

In 2018/19 HMRC issued 203 diverted profits tax preliminary notices to 11 businesses and 204 charging notices to 13 businesses.

HMRC is litigating various disputes where the business was not prepared to change their arrangements and pay additional corporation tax. There are also a number of diverted profits cases under civil or criminal investigation with HMRC's Fraud Investigation Service.

HMRC director of large business, Jo Wakeman, said: 'We're making progress in tackling those who think it's ok to shift their profits offshore and avoid paying tax in the UK on their economic activities here.

'The £5bn secured so far since the diverted profits tax was introduced shows that it's helping to bring in additional money for the UK's vital public services.'

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Multinationals pay £5bn as profit shifting tax rules bite

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2015 saw the introduction of the diverted profits tax(DPT) which was designed to change behaviour and clamp down on contrived tax schemes used by the largest digital multinationals to avoid corporation tax as a result of their tax structures allowing for profits to be offshored rather than taxed in the country where their sales take place, while a tightening of transfer pricing rules put pressure on these global players.

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Sajid Javid is reported to be drawing up plans to curb the entrepreneur tax break (via Getty Images)

The government will reportedly scale back a tax break for entrepreneurs amid concerns it is overly generous to the wealthy.

A senior cabinet minister told The Financial Times that the Chancellor Sajid Javid is drawing up plans to curb the tax break.

Read more: Sajid Javid's post-Brexit Budget set for 11 March 2020

The Conservatives' general election manifesto outlined plans to review and reform the relief.

Earlier this month Boris Johnson indicated to a group of female entrepreneurs in his Uxbridge constituency that the government would go ahead with the plans.

He told them: "I have to tell you the Treasury is fulminating against it because there are some people who are staggeringly rich who are using that relief to make themselves even more staggeringly rich."

The tax break was introduced in 2008 by the Chancellor Alistair Darling. There had been fears that changes to capital gains tax would harm small business owners.

The relief allows entrepreneurs to pay a lower rate of 10 per cent of capital gains tax instead of the usual 20 per cent.

Last year the former head of HMRC called on the government to scrap the tax. Sir Edward Troup said break provided "no incentive for real entrepreneurship".

Additionally The Institute for Fiscal Studies said that the relief does little to change "the amount of income [businesses] create" and it can "limit the government's ability to raise revenue".

Read more: Chancellor's Budget on 11 March - to tax or not to tax

Miles Dean, head of international tax at Andersen Tax UK, said: "It beggars belief that just as the UK is going it alone and leaving the EU, the newly elected Tory majority government proposes to... curb a tax relief that inspires many entrepreneurs to cut loose and take risks".

He added: "Politicians need to consider in detail what this actually means commercially and what it will do for an economy that relies very heavily on entrepreneurs."

The Treasury declined to comment.

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Entrepreneur tax relief to be scaled back in Budget

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The government will reportedly scale back a tax break for entrepreneurs amid concerns it is overly generous to the wealthy. A senior cabinet minister told The Financial Times that the Chancellor Sajid Javid is drawing up plans to curb the tax break.

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Amazon’s Warning on UK DST

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(via Getty Images)

Amazon's UK boss has played down concerns about a new tech tax, but warned the move could raise costs for small businesses using its platform.

The government's 11 March Budget is expected to include a digital services tax, which will charge a two per cent levy on the UK revenue of technology companies.

Read More: Amazon's Deliveroo investment could cause higher prices, says CMA

Douglas Gurr, Amazon's UK country manager, said the tax would not impact plans to create new jobs and open more distribution hubs.

"We are very committed to the UK for the long term. We have three research and development sites and two corporate offices," he told the Financial Times.

"As long as the UK continues to be a place where we get great talent and we have customers to serve, we will continue to be committed."

However, Gurr suggested that Amazon could offload the additional costs by raising charges for the small businesses that use its platform.

"If you are not careful in the design, these taxes can actually directly hit all of the small businesses that use our services," he said.

"The majority of sales on our marketplace are independent businesses. If that tax is passed on to them, that is quite a significant hit."

In July last year France introduced a three per cent tech tax on digital companies, prompting Amazon to hike its seller fees by the same amount.

Gurr said that the UK should shun its plans for a national tax in favour of a "supranational approach" similar to cross-border proposals put forward by the Organisation for Economic Cooperation and Development (OECD).

Read More: Amazon strengthens dominance of UK e-commerce market

The government has vowed to implement the new tax in April, saying it will pull in roughly £500m per year. However, the move risks sparking anger with the US, which has argued the measures unfairly target American companies.

The reforms come amid accusations that tech giants such as Amazon, Google and Facebook dodge taxes by booking their profit in low-tax countries such as Ireland, despite serving customers around the world.

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Amazon says UK tech tax could hit small businesses - CityAM

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Amazon's UK boss has played down concerns about a new tech tax, but warned the move could raise costs for small businesses using its platform. The government's 11 March Budget is expected to include a digital services tax, which will charge a two per cent levy on the UK revenue of technology companies.

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on the question of State Aid

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To find out if your web browser supports JavaScript or to enable JavaScript, see web browser help.

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Netflix has been accused of funnelling as much as £330m in profits made from operations outside the US into tax havens, while receiving generous relief for making shows such as The Crown in the UK, which helped cut its bill.

The Taxwatch thinktank has estimated that in 2018 Netflix moved between $327m and $430m (£250m-£330m) in profits from international operations outside the US, including the UK, to low-tax jurisdictions such as the Netherlands.

Despite having more than 10 million subscribers paying more than £860m in subscription fees each year in the UK, Netflix UK received a €57,000 (£51,000) rebate from the government in 2018. The company's UK financial filing stated revenues of just €48m, and pre-tax profits of €2.3m, because the hundreds of millions of pounds from British subscribers are channelled via its European headquarters in the Netherlands.

At the same time Netflix, which has a market value of $150bn, claimed £924,000 in tax relief as part of government incentives to make sure Britain remains a competitive location for making productions, according to the report. High-quality TV shows made in the UK that cost more than £1m per episode to make, such as The Crown, and films that pass a "cultural test" are eligible for relief. Netflix, which has more than 200 staff in the UK, spent $500m making more than 50 TV shows and films in the UK last year.

"This research shows that Netflix is ripping off our public services by channelling profits through tax havens even though it appears to have employees, property, and a substantial customer base in the UK," said John McDonnell, the shadow chancellor.

"What's even worse is that Netflix is claiming tax reliefs in the UK at the same time as it's channelling profits overseas."

McDonnell said the report shows the government needs to go further than implementing its proposed "digital services tax", which the Office for Budget Responsibility (OBR) forecasts will make just £30m each from the likes of Facebook, Amazon, Google and Netflix.

"The government should ... support Labour's proposal for unitary taxation of multinationals, which would require Netflix and other large multinationals to pay their fair share of tax," he said.

A Netflix spokesman said: "Netflix has always paid the taxes required in the countries where we operate."

In September, Amazon revealed it received €241m in tax credits in 2018, despite efforts by EU authorities in Brussels to ensure the company pays more tax. Amazon Europe, which is based in Luxembourg and aggregates the billions of pounds of sales the retailer makes from individual countries across the continent, received the credits after reporting a pre-tax loss of €493m in 2018. Sales rose 11.6% to €28bn.

Amazon, which is being pursued by the European commission for more than €250m over "illegal tax advantages" in Luxembourg, paid just €55m in tax on European revenues of €24.9bn in 2017. In 2016, it paid €16.5m on revenues of €21.6bn.
Topics

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Netflix accused of funnelling UK profits through Netherlands

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Netflix has been accused of funnelling as much as £330m in profits made from operations outside the US into tax havens, while receiving generous relief for making shows such as The Crown in the UK, which helped cut its bill.

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France has warned the US that it will face retaliation from the EU if it tries to impose "highly disproportionate" trade tariffs in response to its digital tax on the likes of Google and Amazon.

In a letter to Robert Lighthizer, the US trade representative, on January 3, Bruno Le Maire, the French finance minister, said that "if the US were to decide to impose trade sanctions against the EU over the French Digital Services Tax, it would deeply and durably affect the transatlantic relationship at a time when we need to stand united".

France is "in touch with the European Commission and other EU Member States on the subject" and they are "contemplating the various options to defend our trade rights in a proportionate and determined manner, as we have in the past," the minister wrote.

If tariffs are imposed by the US then the EU is likely to respond in kind, say analysts. Mr Le Maire is due to meet the EU trade commissioner Phil Hogan on Tuesday morning in Paris, and will discuss the options on the table.

The US trade representative is scheduled to hold a public hearing on Tuesday about the proposed tariffs in retaliation for France's digital services tax. US technology groups who have supported the administration's hardline stance on the digital taxes are expected to square off against importers of French and other EU goods affected by the planned levies

If neither side backs down, the US-French row over digital taxation is likely to become a wider transatlantic trade war this year with Italy bringing in an equivalent tax and the UK, Austria and Turkey among others set to levy their own in the months ahead.

In December, after publishing a 93-page report on the French tax, Mr Lighthizer said that he was exploring retaliation against what he described as the "growing protectionism" of European countries that "unfairly targets US companies".

Mr Le Maire said in his letter that he contested that conclusion, insisting that the current tax does not discriminate against US digital companies, is compliant with WTO rules and would be withdrawn once agreement on an international tax was agreed with the OECD.

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He said any dispute should go through the WTO and asked that "US authorities suspend their proceedings and cease to contemplate unilateral tariffs that are neither warranted, nor proportionate, nor adequate to address this issue".

However, despite French optimism over the OECD compromise and proposals by the body in October, talks have recently stalled with the US indicating it wanted to make the global rules optional rather than compulsory.

In a move that others see as destroying the Paris-based process, the US Treasury Secretary Steven Mnuchin walked back US support for the OECD plan, saying it had "serious concerns".

The EU also said in December that it would be ready to revive its own plans for a region-wide levy if international negotiations failed.

France has been at the forefront of the digital taxation issue, and thus in the US's sights as individual countries have increasingly moved to take unilateral action as efforts to build international consensus have foundered.

More than two dozen countries have already implemented or are considering their own ways of levying taxes as they grapple with how to take their share of transactions brokered by online platforms whose headquarters and offices often reside overseas.

Boris Johnson, the UK prime minister, said in December that he wanted to ensure US tech companies such as Google, Facebook and Amazon make a "fairer contribution".

Mr Le Maire's intervention comes ahead of the end of the consultation period for the US Congress over the proposed imposition of 100 per cent tariffs on up to $2.4bn of French goods, including champagne. A final decision is expected in the coming weeks, say people familiar with the matter.

"The trade sanctions that your office is proposing are highly disproportionate. Their impact on French companies and workers would by far exceed the impact of the Digital Services Tax on American companies," wrote Mr Le Maire.

"I would also like to point out that US companies and workers will not benefit from increased tariffs, [and] the only alternative to French products in some cases is in fact Chinese rather than American," he added.

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France warns US against digital tax retaliation

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France has warned the US that it will face retaliation from the EU if it tries to impose "highly disproportionate" trade tariffs in response to its digital tax on the likes of Google and Amazon.

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The impact of the Gig Economy on Taxation

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The impact of the Gig Economy on Taxation

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The world of work is changing as the gig economy - and the self-employed themselves - go global. That will leave a big hole in countries' coffers, says Dominic Frisby.
Governments around the world have got a big problem on their hands. I wonder if many of them even realise it. What has been their biggest source of revenue for years is going to get that much harder to collect, just as their needs, whether to cover spending programmes or service debts, grow more pressing.

Across the developed world, 50% of government revenue comes from income taxes. The relationship between employer and employee has proved easy to tax: the levy is deducted at source. But that relationship is changing.

In the UK, the number of people working for themselves has grown by 50% since 2000, compared with a 6% rise in employees over the same period. London's gig economy has grown by 73% since 2010. But this is a global phenomenon. In Europe, Australia and across Asia there are similar levels of growth. By 2030, says EY (formerly Ernst & Young), a full 50% of full-time US workers will be contingent.

Get ready to gig

In 1990, the three biggest companies in Silicon Valley employed over a million people. Today, the three biggest - Facebook, Google and Apple - have a combined market cap over 60 times higher, yet have a quarter as many employees. The largest taxi company in the world, Uber, has just 16,000 employees. The largest accommodation provider, Airbnb, has 9,053. Yet how many giggers find work as a result of Silicon Valley giants?

Some have criticised the gig economy, saying it exploits people and does not give them the protection they deserve, but surveys show much higher satisfaction levels among the self-employed than among the employed. The large majority of giggers want to stay in contingent work to progress their careers. As we live longer lives many more of us will pursue gig work in what was previously our retirement. Many will embrace multiple income streams as machines - whether artificial intelligence (AI), robot or algorithm - replace blue- and white-collar workers. Employers like it too. Freelancers dramatically reduce the costs and other burdens of employment.

The tax implications are considerable. First, there is the loss to government of employment and payroll taxes, but far bigger is the problem that income taxes will get harder to collect. At present there are few systems in place to deduct tax at source from contingent workers. There is vast scope for non-compliance, whether accidental or deliberate. America's Inland Revenue Service already attributes 44% of its $450bn annual tax gap to the improper compliance of individual business income. In the US, 69% of freelancers surveyed did not even know they had to file quarterly returns.

Chasing the self-employed

A review of employment practices commissioned by former prime minister Theresa May found that self-employed workers typically pay £2,000 a year less in tax than employees in equivalent jobs. Given that someone on the UK average salary of £27,500 would pay about £5,300 in income tax and national insurance, this is no small loss.

The response will be to raise taxes for the self-employed and to re-regulate those who employ them. Already UK freelancers who hire themselves out through limited companies have had their dividend taxes increased, while flat VAT rates for the self-employed have also been altered. Meanwhile, employers such as Uber and Hermes have come under pressure through the courts by those seeking to redefine full-time employment and gig work. Tax authorities will, I suspect, try to find ways to deduct presumed income at source from the platforms providing the work and then leave it to the individual to claim back the difference - much as withholding tax currently works in the US. But none of this is as clean and simple as old-school income tax.

Tax systems, built around a physical economy, have struggled with the intangible, globalised economy. Look at the problems they have with the likes of Amazon, Facebook and Apple. What happens when workers themselves globalise? One estimate is that by 2035, a billion of the world's six billion people will be "borderless", working via the internet in multiple jurisdictions and never spending more than 183 days in any given one. Many will use borderless crypto money, often the most efficient system of payment across the internet, which itself is hard to tax and regulate.

The nations that adapt soonest to the realities of the new, digital, globalised economy around us will be those that thrive best. I don't see a single British politician talking about, let alone preparing for, any of this.

* Daylight Robbery: How Tax Shaped Our Past And Will Change Our Future by Dominic Frisby, Penguin Business, £20. Audiobook on Audible.co.uk. Signed copies are available at dominicfrisby.com

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Why the gig economy means nations will soon find taxation more taxing - MoneyWeek

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The world of work is changing as the gig economy - and the self-employed themselves - go global. That will leave a big hole in countries' coffers, says Dominic Frisby. Governments around the world have got a big problem on their hands. I wonder if many of them even realise it.

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A leading German economic think tank has voiced its support for the OECD's plans for an international minimum corporate tax rate.

The Paris-based international organisation has proposed an overhaul to global tax rules that would ensure companies pay a minimum tax rate in their home countries, establishing "a floor for tax competition among jurisdictions".
Read more: OECD targets tech giants as it shakes up global tax rules
Today, the respected Ifo Institute in Germany said it supported the plan. "It would limit unwanted tax avoidance arising from companies' ability to shift their profits. At the same time, double taxation must be avoided," said Ifo president Clemens Fuest.

In a report on the proposals, Ifo said: "The implementation of a minimum effective tax rate... would reduce profit shifting and generate substantial gains in tax revenues, and would not change much the attractiveness of all countries."

The OECD has also recommended that a company should be deemed to have a taxable business even where its presence is only digital.

The Ifo supported this idea. "This should be a key feature of future international taxation rules," Fuest said.

This proposal by the OECD would overturn long-standing rules that have let digital giants such as Facebook, Amazon and Google move profits around the world to dramatically lower their tax bills.

Large, developed economies with average corporation tax rates would have a lot to gain from such a change in global tax practices. Currently, they lose out on revenue to low-tax jurisdictions such as Ireland.

The OECD has breathed new life into a long-running debate on how to reform tax at a global level, an issue fraught with difficulties.

In a report in October, the organisation said: "The current rules dating back to the 1920s are no longer sufficient to ensure a fair allocation of taxing rights in an increasingly globalised world."

Read more: Boris Johnson to woo businesses with extensive tax breaks

The G20 group of the world's biggest economies has charged the OECD with creating detailed plans on global tax. It is currently in the consultation phase.
(Image credit: Getty)
If the proposals are approved by the countries, they would be introduced into domestic tax systems and treaties between countries.

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Leading German think tank supports minimum global tax rate plans - CityAM

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A leading German economic think tank has voiced its support for the OECD's plans for an international minimum corporate tax rate. The Paris-based international organisation has proposed an overhaul to global tax rules that would ensure companies pay a minimum tax rate in their home countries, establishing "a floor for tax competition among jurisdictions".

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Google has used the double Irish arrangement to pay no tax on profits of almost $40 billion over the past three years.

Newly filed accounts for Google Ireland Holdings, one of the tech company's Irish subsidiaries, shows that it had profits of $15.5 billion in 2018, up from $14.4 billion the year before.

In addition to the $8.9 billion that Google Ireland Holdings made in 2016, the firm has recorded profits of $38.9 billion (€34.8 billion) over the past three years. The company did not pay any Irish corporate tax on these profits as it is tax resident in Bermuda, which has a 0 per cent tax rate.

Google Ireland Holdings was established in 2003, and it is likely that it also made significant profits...

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Google uses 'double Irish' loophole to pay no tax on $40bn of profits

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Google has used the double Irish arrangement to pay no tax on profits of almost $40 billion over the past three years.

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Ex-Manchester United boss José Mourinho has agreed a prison term in Spain for tax fraud but will not go to jail.

A one-year prison sentence will instead be exchanged for a fine of €182,500 (£160,160). That will be added to a separate fine of €2m.

Spain rarely enforces sentences of less than two years for non-violent or first-time offenders.

He was accused of owing €3.3m to Spanish tax authorities from his time managing Real Madrid in 2011-2012.

Prosecutors said he had created offshore companies to manage his image rights and hide the earnings from tax officials.

Image rights cover the use of a person's likeness, voice, signature and mannerisms - and can be very lucrative for footballers and managers.

Mr Mourinho's move to Manchester United in 2016 was even delayed after it emerged his previous team Chelsea owned the trademark to his name.

Spanish prosecutors said that Mr Mourinho, a Portuguese national, had set up multiple business entities in the British Virgin Islands and elsewhere to manage his image rights.

They argued that was designed to obscure his financial gain from such deals - and he left it undeclared in his tax statements after he moved to Spain.

He is the latest high-profile football personality to strike a deal with Spanish authorities, which are pursuing a crackdown on tax evasion or fraud by the country's many resident star players.

In January, Cristiano Ronaldo accepted a fine of €18.8m and a suspended 23-month jail sentence, in a case which was also centred around tax owed on image rights.

He was playing for Real Madrid at the time of the offence between 2010 and 2014 - the same team Mr Mourinho was managing at the time of his own tax violation.

Unlike the Ronaldo case, Spanish media were not told about Tuesday's hearing, so there was no crowd to meet the former Manchester United manager, who lost his job in December.

Another former Real Madrid star, Xabi Alonso, is also facing charges over alleged tax fraud amounting to about €2m, though he denies any wrongdoing.

Marcelo Vieira, who still plays for the club, accepted a four-month suspended jail sentence last September over his use of foreign firms to handle almost half a million euros in earnings.

Barcelona's Lionel Messi and Neymar have also found themselves embroiled in legal battles with the Spanish tax authorities.

As in many of the cases, Mr Mourinho's deal which spared him from prison had been agreed in advance with tax officials.

Mr Mourinho's representatives have declined to comment.

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Ex-Manchester United boss José Mourinho has agreed a prison term in Spain for tax fraud but will not go to jail. A one-year prison sentence will instead be exchanged for a fine of €182,500 (£160,160). That will be added to a separate fine of €2m.

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Dr Phyllis Alexander, Merima Balavac, and Andy Lymer provide guidance on how to improve tax literacy and tax morale in young adults

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Excellent BBC Radio Programme on Tax Avoidance, advent of G20/OECD ctions

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Excellent BBC Radio Programme on Tax Avoidance, advent of G20/OECD ctions

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Tax Avoidance: The Hidden Cost - BBC Sounds

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Catch up on your favourite BBC radio show from your favourite DJ right here, whenever you like. Listen without limits with BBC Sounds.

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London Business News | Londonlovesbusiness.com

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An investigation by the Mirror newspaper found that Amazon paid just £61.7m, in UK tax over 20-years, whilst M&S paid a whopping £65.4m in 2018.

The investigation found, since 1998 Amazon had a turnover of £6.86bn in the UK and made profit of £213m, along with five years of losses.

However, the newspaper revealed high street retailer, M&S paid £65.4m in corporation tax in 2018, plus £3.3bn over the last 20-years.

The newspaper further reported that, Tesco's corporation tax was £176m in 2018 and Debenhams paid £303m since 2005.

Richard Murphy, a tax campaigner said to the Mirror, "Amazon is taking advantage of the international tax system to exploit the UK. The UK and other countries let them.

"It's time for countries to cooperate to eliminate this type of thing. But the UK is still objecting to many of the reforms."

E-commerce firm, Amazon reported Friday, their financial results, for the three months to 31 December, sales were up to £55.2bn from £46.1bn the year before, up 20%.

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M&S paid more UK tax last year than Amazon has in 20-years | London Business News | Londonlovesbusiness.com

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An investigation by the Mirror newspaper found that Amazon paid just £61.7m, in UK tax over 20-years, whilst M&S paid a whopping £65.4m in 2018. The investigation found, since 1998 Amazon had a turnover of £6.86bn in the UK and made profit of £213m, along with five years of losses.

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What should the top rate of income tax be? Should it be 70 per cent, as has been informally suggested by the young star of the US Democratic party, Congresswoman Alexandria Ocasio-Cortez? That instinctively feels too high to me. But, as an economist with sporadic hopes of making logical arguments based on evidence, I admit that "instinctively feels too high" is a weak response.

What about 50 per cent, the official policy of the UK's opposition Labour party at the last general election? Or zero, the optimal top rate that emerged from a thought experiment posed by the late James Mirrlees, a Nobel laureate in economics?

An alternative is to tax wealth instead of income, as US Democratic Senator Elizabeth Warren has proposed. But - at least in principle - there is not much difference between a small annual tax on total wealth and a large tax on the nominal return generated by that wealth.

To make the case for a top rate of tax above 70 per cent, it helps to believe four things.

The first is that taxable income itself won't evaporate in the face of a high rate, as it did in the UK when the top tax rate was briefly raised from 40 to 50 per cent in 2010, then cut to 45 per cent. Most high earners found it easy to realise income early, or late, and avoid the 50 per cent rate. A permanent increase is harder to avoid; so is an increase that is enforced with determined (or draconian) measures; as is an increase levied by a large economy with global legislative reach such as the US. In smaller economies such as the UK's, the very rich are more likely to take themselves elsewhere for any given tax rate.

One academic paper produced by Emmanuel Saez (a star in the study of inequality) and Peter Diamond (a Nobel laureate and colleague of Mirrlees) estimated that the combined rate of tax on the income of high earners could be 73 per cent in the US without proving counter-productive. Another paper, published in the same journal, by Gregory Mankiw and co-authors, put the optimal top rate at just under 50 per cent instead. The difference lies in the assumptions.

The second thing one needs to believe is that the rich will barely miss any extra income if tax rates rise. The truth of this is unknowable, although another famous study from yet more Nobel laureates, Daniel Kahneman and Angus Deaton, suggests that money will not improve your everyday mood and wellbeing after an income of $75,000 a year or so. To reach their conclusions about the 73 per cent rate, Professors Diamond and Saez assume that a dollar is 25 times more valuable to a person on about $50,000 a year than to a person on $500,000. That is not an insane assumption, but it's an assumption nonetheless.

If you accept these first two beliefs, the economic case for a high top rate of tax follows. A high rate maximises revenue if the tax base doesn't shrink too much, and revenue maximisation is a reasonable goal if it's true that the rich would barely notice the lost income.

But this argument ranges far beyond economics. If you like high tax rates, the third thing it helps to believe is that inequality is intrinsically corrosive. Perhaps it undermines democracy. Perhaps it causes stress, envy or resentment. The empirical evidence is not much help here; it is sketchy and often seems tendentious. Causal channels are unclear: does inequality lead to a hollowed-out state? Or does a hollowed-out state enable inequality?

Perhaps a thought-experiment is more helpful here: how would you feel about a policy that simply confiscated resources from the super-rich and destroyed them? Would such a policy be a criminal waste and a grotesque infringement of liberty, or a helpful rebalancing of the scales?

Then there's a fourth, often unstated, belief: that the rich have so much money that a high rate of tax will raise serious revenue. That depends on who you regard as "rich". Ms Ocasio-Cortez mentioned a threshold of $10m. Profs Diamond and Saez focused on the highest earning 1 per cent of taxpayers, implying that the band would apply above around $500,000 a year. The Labour party wanted its highest rates to apply on incomes over £100,000. These are very different definitions of "rich" and they have very different implications for revenue.

For example, Ms Ocasio-Cortez's income threshold of $10m is higher than that required to get into the top 0.01 per cent of the US income distribution: about 16,000 families. This tiny slice of the US population receives a less-than-tiny 5 per cent of total US income - which nevertheless implies that 95 per cent of income is earned by those making less. The super-rich are a tempting target, but a serious attempt to raise revenue cannot stop with them.

Whether we are talking about income or wealth, the lion's share lies not with the billionaires but with the comfortably off. It is nice to talk about taxing somebody else's money, but in a world of chronic budget deficits and worsening demographics, the ethics and economics of higher tax rates are unlikely to remain someone else's problem.

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The super-rich are an easy target for tax

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What should the top rate of income tax be? Should it be 70 per cent, as has been informally suggested by the young star of the US Democratic party, Congresswoman Alexandria Ocasio-Cortez? That instinctively feels too high to me.

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In order to stay in the UK, where she has set up house with Prince Harry in Kensington Palace, the Duchess has been granted leave to remain, an immigration status which means there is no limit to her time in the country.

Speaking about the duchess obtaining a visa, Kensington Palace said: 'Ms. Markle has taken full legal advice on her right to remain in the UK and will be fully compliant with all requirements at all times. She will go through the normal visa process.

'Ms. Markle intends to become a British citizen going through the normal process, which will take a number of years.'

In the meantime, Markle remains a US citizen subject to its tax laws. As Andrew Hubbard, tax consultant with RSM, points out, citizenship does not generally play a part in determining taxing rights, except in the US (and one other country - Eritrea).

'US tax operates on a citizenship basis and so US citizens are within the US tax system wherever in the world they live and regardless of where their income arises.

'There are a complex set of reliefs and exemptions which will often mean that no US tax is actually payable but all US citizens are required to complete a US tax return even if they have no US income,' he pointed out.

Hubbard said: 'The US has the political clout to enforce its citizenship policy. The Internal Revenue Service (IRS) has agents working throughout the world and many governments have concluded agreements with the US to assist enforcement of the policy.'

US tax guidance notes state 'you are generally taxed on income available to you, regardless of whether it is in your possession.'

Potentially, that could mean distributions from Prince Harry's £20m trust fund, could be liable for tax, as it is money which is 'available' to his wife. In addition to income from the fund, the Royal couple also receive allowances from the Queen and Prince Charles for their housekeeping and Royal duties.

The US tax system does include a foreign earned income exclusion, which allows US citizens to exclude a certain amount of earnings while living in another country. In 2018 this limit was set at $104,100 (£81,250).

To qualify individuals need to pass one of two tests - either the physical presence requirement, which means spending 330 days of the year in a foreign country, or the bona fide residence test, which is where someone is a resident of a foreign country for a continuous period of time including one tax year.

There is also the foreign housing exclusion, which gives the taxpayer an additional deduction or credit for living expenses abroad, but does not include 'expenses that are lavish or extravagant under the circumstances'.

If Prince Harry's assets are in a foreign trust, Markle would have to fill out Form 3520 to disclose the gifts she receives from it. She would also have to report other gifts, such as jewellery, that she receives.

Markle would also be subject to the reporting requirements for Foreign Bank and Financial Accounts for accounts over which she has ownership or signatory authority. That means she would have to report accounts worth more than $10,000. Any foreign institutions that hold Markle's assets would also have to disclose that to the US government under the Foreign Account Tax Compliance Act (FATCA).

In view of the requirements, most financial commentators have suggested Markle is unlikely to combine bank accounts with her husband, which would risk the Royal Family's financial arrangements being reported to the US tax authorities.

One option for Markle is to renounce US citizenship, a step also followed by MP Boris Johnson who found himself paying taxes on the sale of his London home as he was a US citizen at a time. There is currently a $2,350 fee for doing this.

Markle would also have to face the exit tax if she leaves the US permanently. This would treat all her assets - including stocks, bonds and property - as if they were sold on the day before the expatriation date and would impose levies on them based on their fair market value.

With a baby due in the spring, Markle and her advisors are likely to considering the tax implications carefully as if she retains her citizenship then any child would also potentially have US citizenship and tax responsibilities.

Hubbard noted: 'But these things do not work in reverse. So if a future US President were to marry a British citizen who was tax resident in the US, HMRC officials could not go knocking at the door of the White House asking questions about family wealth. If they did I suspect that they might be reminded in no uncertain terms about the Boston tea party and the capacity of tax disputes to escalate into something much worse.'
Report by Pat Sweet

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Meghan Markle's tax status puts Royal finances in view

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Meghan Markle could be bringing more than a touch of Hollywood glamour to her new role as Duchess of Sussex, with reports that the former actress may also be adding to the Royal Family's tax complications while she remains a US citizen

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Dispatches. - Offshore Secrets of the Rich

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Dispatches. - Offshore Secrets of the Rich

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Taxadus - Playing the Tax Avoidance Game

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Taxadus - Playing the Tax Avoidance Game

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Taxodus - Playing The Global Tax Avoidance Game

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Learning on Screen - The British Universities and Colleges Film and Video Council

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Learning on Screen - The British Universities and Colleges Film and Video Council

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What does the chart show?
The tax take from inheritance hit a record high of £5.2bn in 2017-18. According to data from HM Revenue & Customs released this week, inheritance tax receipts increased by 8 per cent between 2015-16 and 2016-17 as rising property prices continued to pull more individuals into the net.

Why are we paying more?
Rising property prices and the fact that the nil-rate band, the threshold at which people pay IHT on a property, has been frozen at £325,000 since 2009 explains a big jump in the IHT haul in the past nine years.

House prices have risen by more than 30 per cent since 2009-10, according to the Office for Budget Responsibility (OBR). HMRC data show a £17bn increase in the capital value of estates between 2009-10 and 2014-15.

That has helped push up IHT receipts by an average 10 per cent a year since 2009-10. Over that time the total income from receipts has risen from £2.4bn to £5.2bn and the number of estates liable for IHT has increased.

In recent years, however, the average IHT bill per estate has declined. Between 2014-15 and 2016-17 the average liability per estate fell by £2,000 to £179,000. Despite the fact receipts have risen sharply, the tax still only accounts for just 77p of every £100 raised nationally, according to the Resolution Foundation. Just over 4 per cent of estates are subject to it.

Is the increase all down to property prices?
The bulk of IHT receipts come from residential property. But as the saying goes, nothing is certain but death and taxes. And between 2014-15 and 2015-16 a sharp increase in the number of winter deaths resulted in a big jump in IHT receipts.

According to HMRC, an estimated 43,000 "excess deaths" - a measure used by the ONS to express higher than average winter mortality - resulted in a 22 per cent increase in IHT receipts in 2015-16.

What if house prices keep going up? Will we keep on paying more?
No. A new allowance was introduced in 2017 that applies to property passed to direct descendants on death. It means that individuals have an additional IHT allowance on top of the £325,000 nil-rate band and the effect has not yet filtered into the HMRC data.

The new band will reduce the amount of tax Britons pay. The residence nil-rate band is currently set at £100,000 and will rise to £175,000 by 2020-21, meaning that from April 2020 a couple will be able to pass on an estate worth £1m.

According to the OBR, the introduction of the nil-rate band will reduce IHT receipts by about £200m in 2017-18 and around £1.5bn in 2020-21.

Is inheritance tax due a shake-up?
Yes, if you ask Philip Hammond, the chancellor. Mr Hammond ordered a review of the notoriously unpopular and "particularly complex" regime in February, tasking the Office of Tax Simplification with new proposals to make it clearer. The OTS is due to report back before this year's Budget.

Mr Hammond is not the only person who thinks it needs reform. IHT has been dubbed the "most hated tax in Britain", lambasted by one half of society who believe it is too punitive and want to pay less of it, and slammed by the other for being too easy to avoid and for perpetuating generational unfairness.

In May 2018 the Resolution Foundation said the current system "should be abolished and replaced with a new system that commands greater public support by being fairer to families and harder to avoid".

Les Cameron, inheritance tax expert at Prudential, said: "One chancellor described IHT as a voluntary levy paid by people who distrust their heirs more than the Revenue.

"What he was getting at, and what consumers should be aware of, is that it's a relatively easy tax to avoid. They can reduce inheritance tax bills by making use of their allowances, using trusts and different type of investments to maximum effect or simply by giving their money away to reduce their wealth."
This article has been amended since original publication, to correct the IHT nil-rate threshold.

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What does the chart show? The tax take from inheritance hit a record high of £5.2bn in 2017-18. According to data from HM Revenue & Customs released this week, inheritance tax receipts increased by 8 per cent between 2015-16 and 2016-17 as rising property prices continued to pull more individuals into the net.

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The case for tax rises to fund creaking public services in the UK, an ageing and indebted nation, will only grow as an issue in the year ahead. Public attitudes towards higher taxes are softening as opposition to further austerity hardens.

Many taxpayers in the UK already face dramatically higher marginal rates of tax than the headline income tax rates of 20p and 40p suggest. That is partly due to overlooked national insurance contributions but also, crucially, because at different points on the income spectrum benefits and tax allowances get withdrawn and tax-like contributions rise. This means that less of an extra pound of earnings is retained by households after all the deductions.

This point may sound like fodder for tax anoraks rather than a matter of high politics. But that would be to misread the new reality. As the tax system has become more complicated so, too, have the politics of tax rises.

To survey those most affected is to go on a virtual tour of some of Britain's most consequential electoral groups. Start with the seven million low and modest income families - including half of all households with dependent children - who are eligible for the new universal credit. Those paying income tax face losing 75p of every extra pound earned.

Consider, too, the almost half a million better-off families, with a parent earning between £50,000-£60,000, whose child benefit is withdrawn as their income rises. This creates effective marginal tax rates of 60 per cent for those with two children, rising to 74 per cent for those with four.

Then contemplate the position of graduates. Each year hundreds of thousands start repaying their student loans via a 9 per cent charge on income above £25,000 - creating long-term marginal tax rates of 41 per cent for those on the basic rate and 51 per cent for higher rate payers. Whether you are friend or foe of the current university finance system, there is no denying that this squeezes the space for income tax hikes.

Nor should we forget the more than half a million highly paid professionals earning between £100,000-£123,700, whose marginal tax rate hits 62 per cent as their income tax allowance is withdrawn. Weigh in "auto-enrolled" pension contributions and some of these marginal rates climb higher still. None of which is to decry the principle of tax credits, graduate contributions or workplace pensions. It is simply to recognise their cumulative effect.

Politics has also played its role. Today's perverse schedule of marginal tax rates arises in no small part from this Conservative government's determination to find ever more ways of cutting working-age welfare. Its Labour predecessor had a soft spot for stealthy ways of taxing the affluent.

No rational person would ever have designed the system that has resulted: large swaths of working Britain retain less of an extra pound earned than Britain's corporate titans.

The options for government and opposition boil down to a choice between ducking, dodging or re-designing. The first of these assumes that punishing marginal rates are a binding constraint: tax rises must, therefore, largely be ducked. The most that can be attempted from this perspective might be to freeze tax thresholds and to make regular, ritual commitments to cracking down on evasion. Necessary tax revenues will not be raised this way.

The second approach is to selectively raise more revenue while avoiding the groups most affected by punishing marginal rates. Tax raids could be launched on wealth rather than income, and on popular targets like big tech and, perhaps, on those with the very highest incomes. This would bring in new funds, though less than many like to think. But it is a piecemeal approach that dodges, rather than deals with, existing problems.

Lastly, there is tax re-design. This would iron out kinks and reliefs in the tax system while broadening the revenue base and raising some headline rates. It is an eminently rational approach: serious funds could be raised and distortions removed. Yet it would meet a wall of resistance. Only a government with a thumping majority, a zeal for reform and a taste for battle will contemplate it.

It is often said that good politics makes for bad policy - a dictum that applies in spades on tax. A generation of choices and bodges weighs down on today's system, aggravating the always vexed question of how to raise more revenue.

Today's advocates of the principle of higher taxes have a good case to make. They need to combine it with practical proposals that navigate the reality of this treacherous terrain.

The writer is chief executive of the Resolution Trust, a not-for-profit organisation

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The politics of UK tax rises are as complex as the system

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The case for tax rises to fund creaking public services in the UK, an ageing and indebted nation, will only grow as an issue in the year ahead. Public attitudes towards higher taxes are softening as opposition to further austerity hardens.

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Apple, Microsoft, Cisco, Alphabet and Oracle

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Apple, Microsoft, Cisco, Alphabet and Oracle

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The five US tech companies with the largest cash piles took advantage of President Trump's tax reforms to spend more than $115bn in the first three quarters on buying back their own stock.

The share buybacks so far this year by Apple, Alphabet, Cisco, Microsoft and Oracle, after the tax change came into force at the end of 2017, are nearly double what the companies spent in the whole of last year, making investors some of the biggest beneficiaries of a plan that was billed as a boost to US jobs.

They also increased their capital investment by 42 per cent compared with the same period last year, to $42.6bn, according to FT calculations.

Tech companies have also led a parallel trend, identified in a report released on Tuesday by Moody's Investors Service, for US companies to channel a large part of their tax windfalls into paying down debt.

The new data add to the debate about the extent to which the tax reforms have boosted investors, rather than stimulating investment and benefiting American workers.

The National Association for Business Economics reported last month that the changes to the tax code had "not broadly impacted hiring and investment plans".

Tech companies had been sitting on some of the largest cash piles, almost all of it stranded offshore where it escaped an immediate tax.

Last year's Tax Cuts and Jobs Act brought these reserves into the tax net but at a reduced rate - in turn freeing the companies to use the money rather than leave it to continue to pile up.

"Most companies are using cash to buy back stock and make acquisitions, rather than invest in new facilities," said Walter Price, a tech investment manager at Allianz. "I think this is good for shareholders and management." Tech companies were also paying down debt they took on in previous years to buy back shares, he added.

Apple, with the largest offshore cash and investment holdings, generated headlines soon after the passage of the tax bill when it said its "direct contribution" to the US economy would be $350bn over the next five years.

Since then, it has lifted its capital spending to $14.5bn, an increase of 14 per cent from the year before. But its spending on buybacks has soared to $62.6bn in the first nine months of the year, nearly three times as much as the same period the year before.

Investors and analysts said that repatriated cash was also contributing to renewed investment. But planning new facilities takes longer than executing a buyback, and will take longer to show up in capital spending figures, said Mr Price.

"There's a strong correlation between tax reform and capital spending," added Youssef Squali, an internet analyst at SunTrust Robinson Humphrey, pointing at Google and Facebook, which plan to spend a combined $37bn between them this year, up from just under $21bn in 2017.

The US commerce department said that growth in business investment overall had slowed in the third quarter after a bumper start to the year. Brett Ryan, senior US economist for Deutsche Bank, said last week he expected a recovery in capex in the fourth quarter, followed by a gradual slowdown in 2019.

Meanwhile, share buybacks have risen 44 per cent so far this year, according to Goldman Sachs, which estimates that buybacks will climb another 22 per cent in 2019. Just 25 companies accounted for 99 per cent of the growth in buybacks this year, the bank found, underscoring the outsized influence of tech companies' use of cash.

In the aftermath of tax overhaul we have seen a drastic change in company behaviour, with companies moving from a net borrower to net payer position

David Gonzales, Moody's senior accounting analyst

Moody's analysis of a sample of 100 non-financial companies with large cash piles found that they had flipped since the tax overhaul was implemented last December from adding debt to repaying it. The selected companies repaid $72bn of debt in the first six months of 2018, close to the $81bn they spent on buybacks and dividends, and more than the $47bn they allocated to capex or research and development.

"In the aftermath of tax overhaul we have seen a drastic change in company behaviour, with companies moving from a net borrower to net payer position," said David Gonzales, Moody's senior accounting analyst.

Tech companies have been in the vanguard, with Moody's finding $6.5bn of incremental net debt repayments at Apple and $4.8bn at Microsoft compared with the 2016-2017 pace. Abbott Laboratories, Chevron and Gilead Sciences were also among those sharply increasing debt repayments.

The debt of US corporations has risen to pre-crisis levels of $9.4tn, or 46 per cent of domestic output, and former Fed chair Janet Yellen has voiced alarm that lending standards have loosened as memories of the crisis fade.

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Five US tech giants spend combined $115bn on buying back stock

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The five US tech companies with the largest cash piles took advantage of President Trump's tax reforms to spend more than $115bn in the first three quarters on buying back their own stock.

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Airbnb's tax arrangements have come under scrutiny from UK authorities, intensifying pressure on the home-sharing app that has transformed the market for short-term holiday rentals since its launch in 2008.

Airbnb, which has faced increasing criticism and legal pressure from international policymakers, said in a filing submitted to Companies House last week that it had been "contacted" by HM Revenue & Customs "regarding the application of tax laws or regulations impacting the company's business".

It is the first indication from Airbnb UK Limited, the entity that submitted the filing, that the company's tax arrangements are in the spotlight in Britain.

Airbnb, which says it offers users more than 5m places to stay in 81,000 cities globally, added that it was also subject to "tax enquiries and proceedings concerning its operations and intracompany transactions", some of which "may result in litigation".

Jolyon Maugham, a tax barrister, said the fact that Airbnb faced tax liabilities as well as proceedings seemed "significant".

"From the note, I would assume Airbnb has been too aggressive in transferring profits abroad," he said. "Given HMRC's apparent disinclination to take up cudgels with US tech companies, I think it's highly significant that they appear to have here."

Airbnb said: "As with many other companies, these are routine checks and we are working closely with HMRC."

The company has already faced pressure from governments and regulators around the world to ensure that the users of its platforms - in particular individuals earning additional income by offering their homes as short-term lets to visitors - pay the appropriate taxes.

In response, the Silicon Valley group has agreed to restrict the number of nights that hosts can rent out their homes in several major European cities, including London, Berlin, Paris and Amsterdam.

Despite these concessions, the company's tax arrangements and those of its users remain controversial. Last year France's finance minister Bruno Le Maire asked why Airbnb generated tens of millions of euros in revenues yet paid only tens of thousands in taxes.

In March, HMRC issued a "call for evidence" seeking to improve value added tax compliance by individuals using platforms such as Airbnb, Amazon and Uber to sell goods, let out spare rooms or take part in the gig economy.

The UK government also indicated it would consider introducing a tax on revenues generated by large tech companies to address widespread fears about aggressive corporate tax avoidance.

The accounts posted by Airbnb last week showed that its UK limited company paid £379,075 of tax on £590,662 of profits in 2017. Another British subsidiary, Airbnb Payments UK limited, paid $282,899 tax on profits of $1.5m; its revenues were $280m.

Dan Neidle, a partner at law firm Clifford Chance, said it would be more difficult for HMRC to pursue Airbnb for additional taxes given that it largely acted as a travel agent and there was less of an argument than with other tech companies about where the revenues were really generated.

But he added: "Of course UK hotels pay tax on their profits, at least in principle, and many Airbnb hosts may not - either because [their rental income is] below the taxable threshold or because they're being badly behaved. It would seem sensible for the UK to pass legislation requiring Airbnb to pass info on hosts' income to HMRC."

An HMRC spokesperson said: "We do not comment on identifiable taxpayers. We make sure that large businesses, just like everyone else, pay all the taxes due under UK law and we don't settle for less."

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Airbnb faces questions from UK tax authorities

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Airbnb's tax arrangements have come under scrutiny from UK authorities, intensifying pressure on the home-sharing app that has transformed the market for short-term holiday rentals since its launch in 2008.

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It was conceived as a big Brussels pitch to disillusioned voters ahead of next year's European Parliament elections, a new way to tax big internet giants so often accused of gaming corporate tax rules.

But the EU's "GAFA" turnover tax (Google, Apple, Facebook, Amazon) risks being stillborn. It is only on Tuesday that Europe's finance ministers meet for their first formal discussion about plans for a 3 per cent levy on tech giants, even though the European Commission proposed it as a stop-gap measure as long ago as March.

The lack of high level negotiations hasn't been for want of trying on the part of some. France has been banging the drum for a "digital services tax" deal by December to show Brussels can act on a problem that resonates with voters. Emmanuel Macron has allies in the fight, but not yet the unanimous support needed to adopt tax laws in Brussels.

Divisions will again be laid bare on Tuesday morning. "There are political, technical and legal problems. We aren't ready to agree this yet," said one diplomat involved in the negotiations.

The hurdles include when Europe's "interim" tax should come to an end (the "sunset clause"); the scope of the tax (should companies who sell data be included?) and fundamental questions such as whether any EU deal would break international tax treaties.

Opponents include the Nordics, who don't think a tax targeting internet users will benefit smaller countries like them. Germany is worried about its car sector and more traditional industries being caught by loose definitions of how to apply the levy. The Irish and the Dutch would rather wait for a broader international agreement than hasty EU measures that could damage their ability to attract business.

Add to the mix fears that Donald Trump sees a European offensive as provocation against US companies and the debate looks as intractable as many bygone Brussels initiatives on tax policy.

But there is an alternative. A new approach to taxing tech is being worked on by a group of 120 countries, including the US, at the OECD. Mr Trump's White House is more amenable to a revenue-based levy for the likes of Google and Facebook than the Obama administration was.

Still, international talks will take years to conclude and some impatient European governments have decided to go ahead regardless. Italy, Spain and the UK have announced plans for national tech taxes. France may reluctantly have to join them.

President Emmanuel Macron will probably see a European failure to act as another boon for Eurosceptics. But on this one, the lesson might just be that some battles are best fought alone.

Table du jour: slowdown lowdown

The world economy is heading for a soft patch (see the negative numbers in the last column above). Here Gavyn Davies breaks down investors' "perceptions of downside, or even recessionary, risks to the global economy".

Planet Europe

Italy is the new Greece
At least that's how it feels for Euclid Tsakalotos, Greek finance minister, who looked over wistfully at the flurry of cameras greeting his Italian counterpart inside the eurogroup on Monday. "That used to be me," Mr Tsakalotos told Giovanni Tria, according to diplomats in the room.

Manfred: the movie
Donald Tusk raised the bar for promo clips with his Die Hard-style spectacular. Now Manfred Weber has gone full Heimat in a soaring appeal ahead of this Thursday's vote to nominate the centre right's champion for the 2019 European elections.

Set between a Bavarian beer-hall and his local church, we see our soft-spoken hero relive his past as a rock guitarist. He even dons a pair of training shoes in a dig at his ironman rival, Alex Stubb. Watch it in all its 118-second glory here.

Trucking against Orban
Guy Verhofstadt launches his latest offensive against Hungary's strongman PM on Tuesday: a touring truck telling voters to "Stop Orban". The anti-Orban van makes its maiden voyage to Brussels EPP headquarters, Hungary's embassy, and EU institutions on Tuesday morning.

"Ms. Hauzeur started bringing food, then giving rides, but soon she was playing host to up to five people a night in her small Brussels apartment. The experience has transformed her, she said.

"It was like a tsunami in my life," she said. "You come and meet these people and you realize they're just like you."

mehreen.khan@ft.com; @mehreenkhn

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It was conceived as a big Brussels pitch to disillusioned voters ahead of next year's European Parliament elections, a new way to tax big internet giants so often accused of gaming corporate tax rules. But the EU's "GAFA" turnover tax (Google, Apple, Facebook, Amazon) risks being stillborn.

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The UK can "learn lessons" from Singapore but is not looking to follow its economic model after Brexit, Foreign Secretary Jeremy Hunt has said.

Mr Hunt, who is on a visit to the Asian city-state, said Singapore's success was grounded in long-term investment in education and infrastructure.

But he said the UK would not emulate its low tax and low regulation climate, as hoped for by some Brexiteers.

MPs will vote on Theresa May's EU withdrawal deal in two weeks' time.

The UK is scheduled to leave the European Union on 29 March 2019.

But it is not clear what will happen if Parliament rejects the withdrawal terms and framework of future relations, amid continuing opposition to the package among many Conservative MPs.

Speaking in Singapore, Mr Hunt warned of "devastating social consequences" if the UK did not leave the EU in three months' time, suggesting it would send a message the government was not listening to the people.

He said the prime minister was still talking to her fellow European leaders about changes to ensure the UK was not "trapped" indefinitely in a customs union with the EU.

"I think she (Theresa May) will find a way to get this deal through Parliament and know that is what the British people would want," he said.

'Dynamism and vitality'

In a speech to business leaders, Mr Hunt said the UK had to carve out a new role for itself outside the EU and could not rely "on sentiment to stay relevant" in the 21st Century.

Some Brexiteers have said the UK should aspire to become the "Singapore of the North" - copying its high-tech economy, with low levels of taxation and corporate regulation to attract foreign investment.

Mr Hunt said Singapore "exemplified the dynamism and vitality of Asia" and the UK could learn from its "strategic approach" to maintaining a competitive economic advantage.

Speaking to the BBC earlier, he highlighted Singapore's record of educational attainment, it having topped the Pisa rankings for performance in maths, science and reading by 15-year olds for several years.

He suggested its focus on long-term economic development, which has seen it lay down a fibre optic cable network across the whole country, was also to be admired.

But he said the way that the UK funded its public services, such as the NHS, would always be different.

"We do not want and do not seek to emulate the social or political model of Singapore," he told Radio 4's Today.

"I was health secretary for nearly six years, I am a passionate defender of a health service that is free at the point of use and, if you remember, I secured quite a lot of extra money for the health service during my tenure, so those things are very different."

'Invisible chain'

Mr Hunt, who is due to visit Malaysia on Thursday, said he wanted the UK to become the "invisible chain" linking democracies, both established and fledgling ones, around the world utilising its cultural strengths and historical connections.

Parliament will begin debating Mrs May's Brexit deal in a week's time, with the crucial vote - which was postponed from December - expected to take place around 15 January.

Mr Hunt said he hoped the further assurances the PM was seeking from EU leaders on the Irish border "backstop" - a contingency arrangement which would see the UK tied to EU rules until its future relationship is sorted out - would be sufficient for MPs to back the deal.

"Theresa May has been very clear this isn't just about words but about text which has legal force," he said.

"She has also been very straightforward about this - the EU has agreed the backstop is temporary and that's a word they have agreed.

"So what we're saying, very simply, is we're not asking for anything new but we are asking you to define what temporary means, so we can have confidence we're not going to be trapped in the customs union for ever against the wishes of the British people."

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The UK can "learn lessons" from Singapore but is not looking to follow its economic model after Brexit, Foreign Secretary Jeremy Hunt has said. Mr Hunt, who is on a visit to the Asian city-state, said Singapore's success was grounded in long-term investment in education and infrastructure.

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Philip Hammond, a man so detail-focused as to have earned the nickname "spreadsheet Phil", looks an unlikely warrior in the latest "tech-lash".

But this week the UK's chancellor of the exchequer joined the vanguard of finance ministers fighting back against tax arbitrage by the world's largest technology companies. In his annual Budget, he proposed to make "global giants with profitable businesses in the UK pay their fair share" through a "digital services tax" on revenues, which could come into force in 2020.

The measure, which would apply only to profitable companies with annual global revenue from certain services of more than £500m, is aimed squarely at the big US companies, such as Amazon, eBay, Facebook and Google.

It aims to protect smaller, locally-rooted businesses which are unable to shift revenues to friendlier tax regimes, and to satisfy a growing public perception that big technology companies pay less tax in the UK than they should.

Boil away the populist rhetoric, though, and Mr Hammond's idea looks likely to become mired in what one lawyer describes as "the digital version of the Jaffa Cake conundrum" - a notorious 1991 definitional dispute over whether the popular British chocolate-and-orange snack should be taxed as a biscuit or a cake.

The dispute over a tech tax could become a defining clash for modern capitalism, pitting the forces of globalisation and the huge tech companies they have produced against the growing popular discontent about shape-shifting big business.

While the issue cries out for a multilateral approach, such global solutions are out of favour with many, including the president of the US, which is home to many of the biggest tech companies.

The tax tech-lash is anything but a UK phenomenon. Emmanuel Macron, the French president, has made fairer taxation rules for digital companies one of his biggest political priorities and is pressing for an EU-wide agreement before elections to the European Parliament next May.

In a letter sent last week to a number of non-governmental organisations and federations across Europe, Bruno Le Maire, French finance minister, wrote: "When the largest digital multinationals don't pay their fair share of tax, the rest of us end up paying more."

Spain's Socialist government has proposed a 3 per cent tax on online advertising, sales of user data and online platforms, inevitably dubbed the "Google tax". "New business areas are not well reflected in the current tax system," María Jesús Montero, Spain's finance minister, said recently. And on Tuesday, EU finance ministers will gather in Brussels over plans for an EU-wide digital services tax of 3 per cent of revenues.

As in all matters fiscal, though, it is more complicated than that. Much more complicated.

Mihir Desai, a professor of finance at Harvard Business School, says countries are "asking more and more of corporate tax at a time when it can do less and less". They are using taxes on companies as a way of raising money, a vehicle for populist sentiment, and a part of national industrial strategy. "We appear to be quite anxious to use tax against larger institutions in aggressive ways," he says.

Technology companies are not fiscal innocents. They have in the past exploited loopholes in the international system, such as the "Double Irish" arrangement which allowed Google and Facebook to route royalties through Irish subsidiaries to reduce tax bills. Other multinationals, including pharmaceutical companies such as Pfizer, also exploited the loophole.

But the technology business poses unprecedented problems for tax authorities. Digitalisation makes it hard to determine the location of the companies' activity, while globalisation has made it easy for them to establish operations in jurisdictions with low tax rates. "Companies do follow the incentives countries give them," says one US tech executive.

Pressure from governments and international organisations - and an awareness among technology companies that tax avoidance is not a good look - have started to plug some of the most egregious loopholes. Ireland took the "double Irish" off the menu in 2015, and companies will have to phase out their use of it by 2020. Facebook, for instance, announced last December it would move to a "local selling model" in many countries, paying tax locally rather than through its international headquarters in Ireland.

But an intergovernmental approach to taxing technology companies is hard to agree, or even frame in a way that matches the rhetoric about "fairness".

The UK's decision to go it alone with its 2 per cent levy on revenues raises the prospect of EU talks breaking down and governments forging ahead with their own levies - the very situation the European solution was designed to avoid. France has told its allies it is willing to follow the UK "if necessary", according to two senior officials.

The EU plan, which requires the unanimous support of all 28 member states, already faces opposition from within the bloc. Germany is concerned that any interim EU tax will provoke retaliatory measures from the US. Smaller member states such as Ireland and Luxembourg fear it will harm their economic competitiveness and ability to attract tech groups.

Some European companies are lobbying against the measure, too. This week, European tech groups - led by Spotify, the music streaming service - publicly voiced their opposition to the tech tax for the first time. Chief executives of Spotify, Booking.com, the travel site, and Rovio, creator of the Angry Birds game, among others, said European tech companies whose revenues are generated in the EU would be hit harder than large US companies that are better resourced to cope with any new levies.

"The proposed DST has been designed with large and highly profitable companies in mind, but will have a disproportionate impact on European companies, resulting in unfair treatment," they wrote.

Businesses in other sectors, such as Germany's carmakers, are also against any EU tax that targets revenues from companies who engage in the sale of data. The automotive companies fear such taxes could penalise them for "smart car" technology, which collects personal information from drivers.

Similar definitional concerns have been expressed about the tax proposed this week by the UK, where it once took months to resolve that the Jaffa Cake was indeed a cake and should escape value added tax. Analysts say it is unclear, for instance, whether app stores such as those operated by Apple or Microsoft would be covered by the measure. It is "crazy" to try to define digital companies, says Michael Devereux of Oxford university's Centre for Business Taxation. "Is Tesco [the retailer] a digital company, because of its internet sales? Are banks? A lot of banking takes place online."

European countries might be betting that Donald Trump will not retaliate against the new tax given that he is no friend of Big Tech - he regularly tweets against Jeff Bezos, Amazon's founder, for instance. However, the US president will face some pressure to respond.

On Wednesday, Kevin Brady, Republican chairman of the US House of Representatives' ways and means committee, described the UK and EU initiatives as "troubling". "Singling out a key global industry dominated by American companies for taxation that is inconsistent with international norms is a blatant revenue grab," he said.

According to Colm Kelly, who leads PwC's global tax and legal services practice, the risk of corporate tax reform being led by individual countries is "we end up with an enormously complex mishmash of different approaches around the world".

The US reinforced its claim to US companies' global revenues in the tax reforms it passed last December. They included a provision on "global intangible low-taxed income", or "Gilti", which taxes "excess" profits earned from a company's intangible assets such as patents and other intellectual property held abroad.

The US technology companies have mostly preferred to stay quiet on the latest episode of the tech-lash, though they question the overall premise that they are not paying their fair share in the EU, pointing to research that shows digital companies pay between 26.8 and 29.4 per cent in effective corporate tax, not 9 per cent, as the European Commission has claimed.

"This is a persistent problem," says the same US technology executive. "It's a reputational problem. How do we get to a point where we pay the kind of numbers the press wants?"

Most back the continuing, slow-moving negotiations towards an international agreement to update digital taxation rules, under the auspices of the OECD and G20.

Luca Maestri, Apple's chief financial officer, says the company needs to study the UK proposal, which was "probably directed more to other tech companies than us". He adds that Apple's "preferred direction" is to "harmonise tax systems and make sure businesses have a clear and transparent understanding of the tax landscape" under the OECD process.

Many of the unilateral measures pre-empt or anticipate that global approach. Mr Hammond's UK proposal will only come into force if an alternative international solution cannot be reached by 2020.

According to Harvard's Prof Desai, the most likely outcome is that individual states will muddle through with a piecemeal approach to corporate tax. But he warns that "in this populist urge to make sure we . . . nail the people we want to nail, we should be careful about some of the collateral consequences".
Additional reporting by Michael Stothard, Madison Marriage, Harriet Agnew, Hannah Kuchler and Tim Bradshaw

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Philip Hammond, a man so detail-focused as to have earned the nickname "spreadsheet Phil", looks an unlikely warrior in the latest "tech-lash". But this week the UK's chancellor of the exchequer joined the vanguard of finance ministers fighting back against tax arbitrage by the world's largest technology companies.

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France will move to collect a tax on digital giants from the start of January without waiting for an agreement on a European levy, as its finances come under pressure from measures taken to appease the gilets jaunes protesters.

Finance minister Bruno Le Maire told journalists on Monday that France will impose a new domestic tax on big international tech groups such as Google and Facebook from the start of 2019, a move that will raise €500m year for the state. The timing of the new tax comes three months sooner than originally planned.

At the start of December, Mr Le Maire said he was giving himself "until March to get a deal on a European tax on digital giants", after which France would act on its own if it failed to persuade its EU partners to agree to a pan-European levy.

However, recent moves by French president Emmanuel Macron to calm anti-government street protests by the gilets jaunes - or yellow vests - have pushed the country's budget deficit above 3 per cent and left France looking for extra sources of revenue.

The measures announced by the president last Monday, which include a boost in income for those on lower incomes, appear to have taken the immediate sting out of the movement which sprang up over green fuel-taxes but is now focused more broadly on living standards and dissatisfaction with Mr Macron.

On Saturday, just 66,000 protesters took to the streets of France, half the number that demonstrated a week previously and well below the 287,000 that took part over a month ago.

But the measures have also raised questions across Europe about France's commitment to the EU's 3 per cent budgetary red line. With spending cuts and extra revenue, including from the tax on digital giants, France hopes to keep the deficit closer to 3.2 per cent, according to prime minister Edouard Philippe in an interview with daily Les Echos.

"We are focusing on the public accounts, and we are taking a series of measures, on business and spending, of the order of €4bn," explained Mr Philippe.

France only last year emerged from a long period with a budget deficit in breach of EU spending rules, but Brussels has indicated that the increased deficit will be tolerated so long as it is temporary.

Although France is still pushing for a European deal by March, its levy on digital giants is expected to include taxes on the sale of private data and on revenue from online market places, and will be calibrated to not hit smaller companies, said a spokesperson for the finance ministry.

It will have a wider scope than the latest European compromise proposal - a narrow levy on advertising sales that would be likely to exclude companies such as Amazon and Apple.

A more ambitious European proposal has been blocked by some EU governments - including Denmark, Sweden and Ireland - that have resisted targeting the revenues, rather than profits, of tech companies on their soil.

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France accelerates plans for its own digital tax

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France will move to collect a tax on digital giants from the start of January without waiting for an agreement on a European levy, as its finances come under pressure from measures taken to appease the gilets jaunes protesters.