Tax challenges and changes in the UK and globally 

Vidcast on the tax challenges and changes in the UK and globally
Featuring Jane McCormick, Head of Corporate Tax, KPMG in the UK

JM: My name is Jane McCormick and I’m Head of Corporate Tax for KPMG in the U.K. 

I think the biggest challenge for all multinationals really at the minute is trying to create certainty and clarity in a situation where actually the world is very complex, and very difficult. Particularly, I think, it’s around what is said to stakeholders. There is increasing scrutiny over what is disclosed in accounts around tax, both in terms of what the numbers are and what the policies are. 

But, in the meantime, tax directors are dealing with businesses that are incredibly complex, and in a tax environment that is increasingly uncertain. To get to that clarity, I think there are probably three things that tax directors need to think about. The first is to have a clearly articulated policy so that you can say to your stakeholders what your attitude is towards tax.

The second thing is how you engage with tax authorities. In a lot of countries we are moving towards a situation where it is much easier to engage with tax authorities on a cooperative basis, moving away from the adversarial type of transactions that were happening to try to get some more certainty. 

And then, the third thing is around processes and controls. At the end of the day, it’s the disclosures in the accounts that those stakeholders are likely to be looking at, and you really need strong processes and controls in place to make sure that when you do that, they are accurate and transparent.

Looking into the future, I don’t think anything is really going to change in terms of the overall complexity. On the one hand, as I say, things are improving in the way that we can deal with tax authorities to try and shut open issues down and achieve certainty. But, on the other hand, tax authorities are trying to protect their national revenue basis and we’re seeing a big uptake in things like anti-avoidance legislation, increased focus on transfer pricing. So It’s not necessarily going to get any easier, maybe we just need all to get a little bit smarter in how we deal with it.