RSS feedsFollowing its high-profile hearings involving the biggest names in the private equity industry, the Treasury Select Committee today called on the government to review the taxation and transparency of the industry.
In its long-awaited report following the hearings, the committee released an interim document where it focused on the controversial issues of interest relief, disclosure and non-domicileds working in private equity.
On the issue of transparency and disclosure the committee said that because the industry had grown so rapidly and owned so many mainstream brands and businesses it needed to improve its reporting and corporate governance.
The committee also put pressure on the Treasury and HM Revenue and Customs to reveal the results of its review of non-dom tax rules, which allow foreigners to be exempt of tax on foreign earnings.
'We are now asking the Treasury to inform us of the outcome of the review carried out in 2003 of the residence and domicile rules as they affect the taxation of individuals. HM Treasury and HM Revenue and Customs need to demonstrate a rigorous approach to claims of non-domicile status,' said committee chair John McFall.
McFall also said officials need to 'examine whether the tax system unduly favours debt as opposed to equity, thereby creating economic distortions'.
The report made no firm recommendations, however, as the committee is planning to hold further evidence sessions on the topic before producing a final report.
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