Tax DodgingFebruary 15th, 2015
I have had a lot of emails from people expressing their concern about tax dodging. My response is below:
I agree with you that tax dodging is morally wrong, and I am very concerned by recent reports alleging large-scale tax avoidance via HSBC’s Swiss banking arm.
If we are to earn our way out of the cost-of-living crisis and pay down the deficit we need thriving businesses that create more secure and better paid jobs across the country, and we need to see taxes being paid not avoided. David Cameron and George Osborne have totally failed to tackle tax avoidance in the last five years. They have failed to close the loopholes we have highlighted. And the amount of uncollected tax has risen under this government. One of the Tories’ top donors, Lord Fink, has admitted to avoiding tax and has even said “tax avoidance: everyone does it”. I disagree.
The next Labour Government will act where the Tories have failed. Labour has set out the measures it will take to tackle tax avoidance in its first Finance Bill. The Conservatives and Liberal Democrats voted against these proposals in the House of Commons on 11 February – but if Labour is elected at the General Election we will make them law, and if I am elected as your Labour MP I will vote for them.
We will close loopholes that cost the Exchequer billions of pounds a year, increase transparency and toughen up penalties. We will act in our first Finance Bill to:
- Introduce penalties for those who are caught by the General Anti-Abuse Rule;
- Close loopholes used by hedge funds to avoid stamp duty;
- Close loopholes like the Eurobonds loophole which allow some large companies to move profits out of the UK and avoid Corporation Tax;
- Stop umbrella companies exploiting tax reliefs;
- Scrap the “Shares for Rights” scheme, which the OBR has warned could enable avoidance and cost £1bn and is administered by HMRC, and so ensure HMRC can better focus on tackling tax avoidance;
- Tackle disguised self-employment by introducing strict deeming criteria;
- Tackle the use of dormant companies to avoid tax by requiring them to report more frequently.
Labour’s measures to tackle tax avoidance will also include:
- Ensuring stronger independent scrutiny of the tax system, including reliefs, and the government’s efforts to tackle tax avoidance;
- Forcing the UK’s Overseas Territories and Crown Dependencies to produce publicly available registries of beneficial ownership;
- Making country-by-country reporting information publicly available;
- Ensuring developing countries are properly engaged in the drawing up of global tax rules.