The first Lord Mayor’s Tax Forum took place on Wednesday 30th April 2014, and brought together more than 250 policy-makers, business leaders, economists and diplomats to discuss the future of corporate taxation in the 21st century. The event was hosted by Fiona Woolf, Lord Mayor of the City of London, at the Mansion House, and sponsored by the CIOT, the Law Society of England and Wales, the City of London Corporation, and the Worshipful Company of Tax Advisers. There were two panel discussions, featuring speakers from business, politics, academia and the tax profession.
Lord Mayor's Tax Forum highlights video
Opening remarks - Rt Hon Fiona Woolf, Lord Mayor of London
The afternoon’s proceedings were opened by Fiona Woolf, who explained that the event was “part and parcel of what Lord Mayors do best; to convene experts, contribute to public debate – and drill down into the pressing issues of the day.”
Session One: Tax Competition – Making the UK attractive to multinational businesses
The first session focused on the attractiveness of the UK to multinational businesses. It was introduced by Vanessa Houlder, Tax and Economics Correspondent at the Financial Times.
David Gauke, Exchequer Secretary, argued that under his Government the tax system has become more competitive, helping bring economic growth, as well as multilateral agreements on tax which have promoted fairness between tax jurisdictions.
Simon Henry, CFO of Royal Dutch Shell, acknowledged that the UK is becoming an increasingly appealing place to do business, but warned that international developments could pose a threat.
Jane McCormick, Head of Tax and Pensions at KPMG UK, argued that greater simplicity and better relief for capital expenditure were a higher priority for multinationals than further cuts in the corporation tax rate.
Tim Voak from the Office of Tax Simplification (OTS), spoke about the complexity index that the OTS is developing which has been used as a tool for evaluating potential areas for tax simplification.
Questions were then put to the panel by the audience. Most were directed to David Gauke and a number focused on the controversial move by Pfizer to buy out AstraZeneca for, as perceived by some, tax avoidance purposes. Other topics included when one country’s competitive tax advantage becomes discriminatory to another country, and how that should be dealt with.
Session Two: Designing an international tax system for the 21st Century
The second session turned to the potential for cooperation in the rewriting of international tax rules. The session was introduced and moderated by Law Society Chief Executive, Des Hudson.
Dr Achim Pross, Head of the OECD’s International Co-operation and Tax Administration division, spoke about the Base Erosion and Profit Shifting (BEPS) project, saying that he was optimistic that this very ambitious project could be delivered, despite the difficulties involved.
Sharon Bowles MEP, Chair of the European Parliament’s Economic and Monetary Affairs Committee, talked of the difficulties of getting unanimity in the Committee on tax policy issues noting that it was easier to get cooperation by getting it embedded in non-tax legislation.
Will Morris, Director of Global Tax Policy at General Electric, challenged the claim that corporations are drawn to particular countries for tax reasons, saying that GE chose to do business in the UK on account of the high quality skills and expertise that were available, and because the country was a good market.
Oxford professor Sir Paul Collier spoke about the irreducible role for ethics in redesigning the international tax system.
The speeches were followed by a lively Q&A session. Paul Collier’s position on the social damage caused by tax avoidance was a particular focus. Additionally Achim Pross was asked whether the BEPS timetable was realistic and the idea was mooted of a clearance house for tax information exchange.
Concluding the Forum, CIOT President Stephen Coleclough thanked all in attendance for contributing to the discussion. He concluded: “The system isn’t broken. But it is straining, and it falls to all of us to play our part in updating international tax rules to make them fit for the 21st century.”