Tag Archive | "tax affairs"

EC to investigate taxation of cross-border workers

Contractors accountants may be interested in a new a new European Commission initiative initiative that aims to make sure cross-border workers are treated fairly when it comes to their tax affairs.

There are about 1.2 million cross-border workers in the EU and this figure is set to increase. A mobile workforce has already been recognised as an important driver to increase employment and business growth across Europe.

Throughout this year, the European Commission will be assessing national direct taxes to see whether workers that cross borders to get to work are disadvantaged.

Algirdas Šemeta, the commissioner for taxation, explained that EU regulations state all citizens are entitled to equal treatment within the single market. Workers have the right to free movement and there must be no discrimination. The majority of EU countries respect these regulations, but the commission will take steps to make sure they are reflected in tax rules if necessary.

If discrimination is unearthed, national authorities must be prepared to make the necessary amendments and if the problem persists, infringement proceedings will be instigated against the offending government, he added.

This is part of the wider campaign to remove the obstacles that are deterring cross border mobility. This includes cases where European citizens earn the majority of their income in a different country and pay more tax than the citizens of that nation. The commission will also make sure that non-resident workers are entitled to the same deductions as residents.

The commission will look at the way individual EU countries’ tax systems affects the employed, self-employed, pensioners and dependents.

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Companies are completely confused by government regulations

The continual changes to employment and tax regulations are leaving companies confused, stifling the country’s competitiveness and hindering job creation.

61% of businesses are unclear as to what is classed as tax avoidance and what constitutes legitimate tax planning and 33% believe they are treat as guilty by HMRC until they can prove their innocence, according to BDO LLP.

A large proportion of UK companies think the current tax framework is to complex and the situation is made worse by HMRC’s aggressive stance. Companies feel they now need to spend more time on their tax affairs instead of focusing on growing their business. Dealing with the Revenue has become more of a burden in the last five years, according to 65% of business leaders and 88% think things would be much easier if the tax rules were simplified.

Employers also have to fight their way through a ridiculous amount of employment legislation. David Frost, the director general of the British Chamber of Commerce, said that there was a growing consensus that employment law is weighted in favour of employees. A lot of employee rights have been implemented as a result of EU legislation but European labour markets are very different to ours.

The UK government should be prioritising job creation as this will lead to future prosperity. Mr. Frost said the coalition must desist from implementing any new employment laws for the next three years and cancel the 1% increase in employer NICs in order to encourage companies to recruit more staff.

Over the next four years, BCC estimates show that new legislation and tax will cost UK employers £25.6 billion.

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