Cross-border Trade and Accounting — House of Commons, 2019-10-30
Topic: Foreign Trade
Luke Patrick Graham (Conservative, Centre-right): As a result, I found that we were not able to get the level of transparency and speed of information when we were working right across China—certainly in a multinational company with lots of subsidiaries—as quickly as one would hope in the 21st century, although I know that China is leading the way in many technological advances Some of these walls and barriers can also be seen in the United States of America. As many people will know, the United States of America is a federal system. Therefore, companies operating in America often have to file individual city, state and federal tax returns. The US does not have VAT. It has sales tax, which varies as between different parts of the country. This puts an additional burden on individual businesses and increases their costs. It benefits accountants and lawyers, but does not necessarily benefit the revenues and profits of companies. If a company is based in New York, it will have a New York tax return as well as a federal one, and if it has operations in different parts of the United States, it may indeed have to submit sales tax and other taxes in those other states, and then aggregate it all together. That means extra costs and extra burdens I hope that the Minister will be able to reassure me that no matter how far we go with devolution in our country, we do not turn to the more federal system whereby we erect more transactional barriers between different parts of the United Kingdom. I do not think businesses, consumers or suppliers want that. We need to ensure that we use accounting systems to make the flow of trade easier, rather than erecting more walls and bureaucracy Accounting systems are also incredibly important for cross-border trade because the more open and secure they can be, and the more internationally verifiable they are, the higher levels of trust there will be between customers, suppliers and Governments all around the world. If a Government are entering a new trade agreement with a different country—or indeed the customers and suppliers of that country are engaging in new trade after a new free trade agreement has been signed—having the accounting systems installed and developed means that they have a common way of working. That means that deals can be struck more quickly and sales can be far more profitable Let me turn to my ask of the Government. The Conservative and Unionist party has always been the party of business. Brexit has obviously taken an enormous amount of Government time. When Parliament is returned—and I hope that I and my hon. Friends on these Benches will also be returned, as well as the hon. Member for Strangford (Jim Shannon)—I hope that we will start putting more Government time and effort into progressing systems such as Making Tax Digital, and providing training and incentive programmes to small and large companies so that they invest in their systems. That will mean that they will have more efficient and effective trade, and can make the most of the great trade deals that the Minister is looking to implement when we return to this place and leave the EU Better accounting systems would also be great for UK consumer rights, because they provide a greater level of transparency, detail and trust. As I am sure the House will appreciate, in the 21st century trust is an enormous issue for consumers in the United Kingdom and around the world. The greater levels of transparency that companies can provide about their products and ways of operating—whether with regard to tangible assets, intangible assets, sales receipts or the taxes they are paying—the greater the faith that consumers will have in them. I can see my hon. Friend the Member for Stirling (Stephen Kerr) smiling at me. He will have received, as I have, many emails from people complaining about multinationals such as Amazon not paying the right amount of tax. I know that they use efficient accounting systems and I am sure that the Government are working with them to try to make sure that when tax is owed it is paid. Accounting systems can provide that level of transparency to give customers faith that where sales are made, the right level of taxes are paid as well. That is the case both for large and small businesses.