Treasury working on new taxation code of conduct

Date: 29th June 2009

Alistair Darling is expected to step up his efforts to combat corporate tax avoidance by calling on British banks to be subjected to more extensive inspections.

While it is estimated that the Treasury has already brought in around £11 billion worth of taxation since the introduction of a voluntary code aimed at encouraging banks to end tax avoidance back in 2004, the chancellor has now hinted that tougher measures may be rolled out in the next few months.

According to Reuters, a Treasury insider has said that a three-month consultation process between the banks and ministers is already underway, with banks to be called upon to adapt their behaviour and comply with the spirit and not just the wording of tax-related laws.

It is anticipated that a new code, which will call on banks to put into place a formal policy on taxation, with the end responsibility lying with the board of directors, will be introduced in September.

"Banks that don't sign up to the code are likely to see active involvement from Revenue and Customs (tax agency) in their tax affairs," the source was quoted as saying.

The government had initially intended to publish its taxation code of conduct back in April.