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HMRC to investigate bank tax avoidance

HM Revenue & Customs has launched a consultation paper into a code of practice on tax for banks.

The code sets out the behaviours the Government expects from banks in the management of their tax affairs and in their relationship with HMRC.

It says this Code is part of the Government’s work to minimise tax avoidance and ensure that large businesses such as banks have a clear understanding of the behaviours the tax authorities expect from them.

Treasury financial secretary Stephen Timms says: “While banks play a vital role in the UK and are important contributors of tax, it is clear that many continue to be involved in tax avoidance that goes well beyond reasonable tax planning.”

The Government says it is seeking feedback on a range of issues, including introducing and complying with the code, how uncertainties arising in interpreting the code could be dealt with and what support banks can expect from HMRC in return.

Timms says: “As part of the consultation we will be talking directly with banks to develop a shared understanding of the principles that underpin the code and, in particular, what it will mean in practice for banks. This is vital to ensuring that the code plays a part in changing the behaviour of banks and in turn minimising the loss to taxpayers through tax avoidance.”

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