ICAS ICAS logo

Quicklinks

  1. About Us

    Find out about who we are and what we do here at ICAS.

  2. Find a CA

    Search our directory of individual CAs and Member organisations by name, location and professional criteria.

  3. CA Magazine

    View the latest issues of the dedicated magazine for ICAS Chartered Accountants.

  4. Contact Us

    Get in touch with ICAS by phone, email or post, with dedicated contacts for Members, Students and firms.

Login
  • Annual renewal
  • About us
  • Contact us
  • Find a CA
  1. About us
    1. Governance
  2. Members
    1. Become a member
    2. Newly qualified
    3. Manage my membership
    4. Benefits of membership
    5. Careers support
    6. Mentoring
    7. CA Wellbeing
    8. More for Members
    9. Area networks
    10. International communities
    11. Get involved
    12. Top Young CAs
    13. Career breaks
    14. ICAS podcast
    15. Newly admitted members 2022
    16. Newly admitted members 2023
  3. CA Students
    1. Student information
    2. Student resources
    3. Learning requirements
    4. Learning updates
    5. Learning blog
    6. Totum Pro | Student discount card
    7. CA Student wellbeing
  4. Become a CA
    1. How to become a CA
    2. Routes to becoming a CA
    3. CA Stories
    4. Find a training agreement
    5. Why become a CA
    6. Qualification information
    7. University exemptions
  5. Employers
    1. Become an Authorised Training Office
    2. Resources for Authorised Training Offices
    3. Professional entry
    4. Apprenticeships
  6. Find a CA
  7. ICAS events
    1. CA Summit
  8. CA magazine
  9. Insight
    1. Finance + Trust
    2. Finance + Technology
    3. Finance + EDI
    4. Finance + Mental Fitness
    5. Finance + Leadership
    6. Finance + Sustainability
  10. Professional resources
    1. Anti-money laundering
    2. Audit and assurance
    3. Brexit
    4. Business and governance
    5. Charities
    6. Coronavirus
    7. Corporate and financial reporting
    8. Cyber security
    9. Ethics
    10. Insolvency
    11. ICAS Research
    12. Pensions
    13. Practice
    14. Public sector
    15. Sustainability
    16. Tax
  11. CPD - professional development
    1. CPD courses and qualifications
    2. CPD news and updates
    3. CPD support and advice
  12. Regulation
    1. Complaints and sanctions
    2. Regulatory authorisations
    3. Guidance and help sheets
    4. Regulatory monitoring
  13. CA jobs
    1. CA jobs partner: Rutherford Cross
    2. Resources for your job search
    3. Advertise with CA jobs
    4. Hays | A Trusted ICAS CA Jobs Partner
    5. Azets | What's your ambition?
  14. Work at ICAS
    1. Business centres
    2. Meet our team
    3. Benefits
    4. Vacancies
    5. Imagine your career at ICAS
  15. Contact us
    1. Technical and regulation queries
    2. ICAS logo request

Corporation tax and multinational enterprises

  • LinkedIn (opens new window)
  • Twitter (opens new window)
Susan Cattell By Susan Cattell, Head of Tax Technical Policy

25 August 2020

Key points:

  • The government should provide a roadmap setting out its long term policy intentions for the taxation of multinationals
  • OECD work on proposals for the reform of the international tax system should be supported
  • Allowing businesses to make plans with confidence should help to maintain and attract investment in the UK

Susan Cattell outlines ICAS recommendations for corporation tax and multinational enterprises.

What has ICAS recommended?

Provide a roadmap setting out the government’s long term policy intentions for the taxation of multinationals

Large businesses and multinational enterprises play a vital role as major contributors to the UK economy, job creators and collectors of tax revenues (VAT, income tax and NICs). Whatever the final outcome of Brexit, it is important that UK tax policy supports the government’s aim of ensuring that the UK remains an attractive place for multinationals to do business.

The tax system needs to be flexible to deal with change, but companies also need to be able to plan for the future with confidence. The Brexit referendum in 2016, together with the current coronavirus pandemic, has resulted in a long period of uncertainty for business. It is important that this uncertainty is not intensified by constant, unpredictable changes to the tax system. Large businesses would welcome a roadmap setting out the government’s long term policy intentions for the taxation of multinationals.

Support the work of the OECD on proposals for the international tax system and avoid introducing further unilateral measures, wherever possible

The introduction of unilateral measures such as the Diverted Profits Tax, or the Digital Services Tax, imposes additional compliance burdens and is likely to give rise to double taxation. An international approach to tackling the taxation challenges arising from multinational companies is preferable, where this can be achieved. The government should continue to support the work of the OECD on proposals to reform the international taxation system. Where unilateral tax measures are deemed to be essential to protect the UK tax base, these should be introduced on a temporary basis and replaced once international agreement has been reached.

It should be noted that much tax administration is ‘outsourced’ to MNEs, with new measures adding to this – for example, the proposed extension of the off-payroll working rules. The Corporate Criminal Offence and the Directive on Administrative Cooperation (DAC 6) are also very widely drawn: risk assessing and putting in place extensive procedures to comply is a considerable burden and has a significant impact on the cost of doing business.

Carry out proper consultation on proposals for Making Tax Digital for corporation tax – and bear in mind the interaction with digital tax systems in other jurisdictions

In implementing Making Tax Digital (MTD) for corporation tax, the UK should learn from other countries, which are increasingly adopting a digital approach to tax administration. The UK needs to bear in mind the interaction with digital tax systems in other jurisdictions because multinationals operate in many countries. If interaction is not considered the cost of compliance is increased. There should be a full consultation on the UK MTD proposals followed by a pilot which all companies can join from the beginning, and which covers an entire tax cycle.

Extensive digital reporting requirements are being imposed – with increasing amounts of data being made available to tax authorities internationally. It is not currently clear how MTD for CT might work in the UK but if it means that HMRC receives far more data some of the current reporting requirements should be removed.

The benefits of adopting our recommendations

  • Providing clarity on the government’s future taxation plans allows businesses to plan for the future with confidence which should help to maintain and attract investment in the UK
  • Developing and implementing an agreed approach to international taxation minimises administrative compliance burdens and helps to avoid double taxation
  • Aligning MTD for multinationals with digital systems in other jurisdictions will reduce compliance burdens and improve reporting
  • Implementing MTD for CT after proper consultation and with a full pilot will minimise disruption and improve efficiency

Join the debate

The recommendations in the ICAS Future of Tax paper were agreed by the ICAS Tax Board in 2020 and inform the work of ICAS Tax. They will be reflected upon and revised to reflect economic, social and political developments.

Please send us your feedback and comments by emailing tax@icas.com or login to the CA Connect forum, an area  exclusive to members where you can post your views and discuss with others.

There are also opportunities to join ICAS tax committees to discuss these recommendations and many other tax policy and practical matters – email tax@icas.com to find out more about being a committee member.

The Future of Taxation in the UK

By Charlotte Barbour, Director of Taxation and Susan Cattell, Head of Tax Technical Policy

10 June 2020

2-23-marsh 2-23-marsh
ICAS logo

Footer links

  • Contact us
  • Terms and conditions
  • Modern slavery statement
  • Privacy notice
  • CA magazine

Connect with ICAS

  • Facebook (opens new window) Facebook Icon
  • Twitter (opens new window) Twitter Icon
  • LinkedIn (opens new window) LinkedIn Icon
  • Instagram (opens new window) Instagram Icon

ICAS is a member of the following bodies

  • Consultative Committee of Accountancy Bodies (opens new window) Consultative Committee of Accountancy Bodies logo
  • Chartered Accountants Worldwide (opens new window) Chartered Accountants Worldwide logo
  • Global Accounting Alliance (opens new window) Global Accounting Alliance
  • International Federation of Accountants (opens new window) IFAC
  • Access Accountancy (opens new window) Access Acountancy

Charities

  • ICAS Foundation (opens new window) ICAS Foundation
  • SCABA (opens new window) scaba

Accreditations

  • ISO 9001 - RGB (opens new window)
© ICAS 2022

The mark and designation “CA” is a registered trade mark of The Institute of Chartered Accountants of Scotland (ICAS), and is available for use in the UK and EU only to members of ICAS. If you are not a member of ICAS, you should not use the “CA” mark and designation in the UK or EU in relation to accountancy, tax or insolvency services. The mark and designation “Chartered Accountant” is a registered trade mark of ICAS, the Institute of Chartered Accountants of England and Wales and Chartered Accountants Ireland. If you are not a member of one of these organisations, you should not use the “Chartered Accountant” mark and designation in the UK or EU in relation to these services. Further restrictions on the use of these marks also apply where you are a member.

ICAS logo

Our cookie policy

ICAS.com uses cookies which are essential for our website to work. We would also like to use analytical cookies to help us improve our website and your user experience. Any data collected is anonymised. Please have a look at the further information in our cookie policy and confirm if you are happy for us to use analytical cookies: