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The crisis in Australia regarding the misuse of information obtained as part of confidential consultations with the Australian Tax Authority over proposed changes to the base erosion and profit shifting rules is unlikely to go unnoticed. The story is fast moving and by the time you read this there may have been further developments. The Tax Practitioners Board website (tinyurl.com/austpb123) is a good place to start.
Informal dialogue between HMRC and tax practitioners can be very valuable. Over the years I have been involved in a number of such discussions and I like to think that input from me and others has benefited taxpayers, agents and HMRC alike. I’ve never seen anybody misuse the process for their own or their firm’s advantage, although that doesn’t stop people coming to their own conclusions – see, for example, the Public Accounts Committee 2013 report ‘HMRC weak in efforts dealing with tax avoidance’ (tinyurl.com/pactaxavapr2013).
I’ve no knowledge of what has gone on in Australia other than what I have read in the media, but it does seem that something did go seriously wrong. Whatever happens there, however, I hope that informal dialogue between practitioners and HMRC can continue. A tighter framework may need to be developed but that should not be an insuperable problem. I can’t share my experiences here – even though they were some years ago – because confidentiality still applies. But I can say that my input at one crucial point in policy development did help to prevent what would otherwise almost certainly have been a car crash in an important area of the tax system. These informal dialogues do matter.
If you do one thing…
If you deal with corporation tax, review the latest updates to HMRC’s Corporate Finance Manual dealing with loan relationships (tinyurl.com/hmrccfmupdates).
