Ethical taxation increasingly features on the business agenda across all sectors, driven in part by the recent legislative focus on anti-tax avoidance measures and increasing public scrutiny, but also by a desire from within businesses to “do the right thing” on taxation matters.
There has been a raft of new anti-avoidance and tax compliance legislation within a relatively short period of time, including a range of new reporting regimes. HMRC is backing up this legislation with a marked increase in investigations, and we expect this trend to continue. There is only one direction of travel when it comes to ensuring businesses "pay their fair share”, especially given the large black hole in the public finances caused by the COVID crisis. Businesses should make sure that they are up to date on the latest measures.
The Budget 2020 also addressed environmental taxes, with headline-grabbing measures such as a new tax on plastic packaging from April 2022. The UK Government committed in June 2019 to bring net UK carbon emissions down to "net zero" by 2050; by its own admission at the time, one of the most ambitious targets in the world. The Government's stated strategy is to create "high-skill, high-wage, low-carbon jobs", and tax policy will play a key role in seeking to influence the momentous behavioural change required of both businesses and consumers to meet this ambition. All businesses will need to consider the impact of the significant and far-reaching fiscal changes expected in this area.