The government has published a consultation document on a code of practice on tax for banks, which seeks to change behaviours and attitudes towards tax avoidance in the sector. Introducing the consultation, which was announced in this year's Budget, financial secretary to the Treasury Stephen Timms said: 'When the government has provided significant support to strengthen the financial system, it is right that measures are taken to introduce a higher level of public transparency.' He added that it was 'clear that some banks have been involved in tax avoidance that goes well beyond reasonable tax planning. The consultation is a starting point in changing the behaviour of banks in relation to tax avoidance.' The code, which seeks to ensure the 'spirit' of the law, rather than the 'letter' is followed, sets out what the government expects from banks in the management of their tax affairs and in their relationship with HM Revenue & Customs, including governance and tax planning. Feedback is sought on a range of issues, including introducing and complying with the code, how uncertainties arising in interpreting it could be dealt with, and what support banks can expect from HMRC in return. The Chartered Institute of Taxation welcomed the consultation, saying that the code reflects good governance and the need for an open and transparent relationship with HMRC. However, it called for the process of making tax law to be improved, so that it is clear to all what the intention of parliament was - so making future codes of practice unnecessary. 'Defining the purpose of established law can be very difficult. The quantity of HMRC guidance is ample proof of this,' said CIOT chief executive Peter Fanning. 'Even in law, not everyone agrees. The challenge is to decide who decides what the "spirit" of the law is and how they decide it.'