U.K. Accounting Body Calls for Scrutiny of Tax Haven Companies

A leading U.K. accounting body is calling on the government to consider barring coronavirus aid to companies that use tax havens.

In a web post Tuesday, the Institute of Chartered Accountants in England and Wales listed the things it wanted the government to do to rebuild the economy after the pandemic. Among these was the call to rethink its policies on tax havens.

“The government should, on behalf of the taxpayer, analyze the entities that received bailouts but are known to have operations in tax havens,” the ICAEW said, noting that, “Governments in France and Denmark made the bold move to deny bailout funds to any company that has a known presence in tax havens.”

• It also called on the government to rethink its policies on corporate incentives, dividends, and pay; to ask whether regulatory capital requirements should be raised for sectors that required large bailouts; and to ensure that both the government and companies are transparent about rescue payments.
• Government aid packages for workers and companies and falling tax revenue during the pandemic mean the government spending deficit could top 275 billion pounds ($339 billion) in the 2020-21 fiscal year, according to the ICAEW—five times more than the 55 billion pounds forecast in the March budget.