LibDems launch £7bn tax avoidance crackdown
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The Liberal Democrats have announced a £7bn crackdown on tax avoidance and evasion.
The move was announced by Chief Secretary to the Treasury Danny Alexander in a speech at the party’s conference in Liverpool yesterday.
Alexander said the £900m spent on the drive would lead to an extra £7bn a year being collected in tax by the end of this parliament in 2014/15.
Last week it emerged that the UK’s tax gap created through evasion, avoidance and collection problems rose by £4bn in 2008/09 to £42bn.
He said: “We will be ruthless with those often wealthy people and businesses who think they can treat paying tax as an optional extra.To those who think the tax man will never come knocking, to those who hire accountants to dream up a clever new tax dodge, I say think again.”
Alexander said the crackdown would target those hiding money in offshore tax havens, root out 50p rate tax dodgers and bring about a fivefold increase in prosecutions.
He said: “Just as it is right to ensure that every benefit claim is fully justified, so must we ensure that every tax bill is paid in full.”
“There are some people who seem to believe that not paying their fair share of tax is a lifestyle choice that is socially acceptable. That is not true. Just like the benefit cheat, they take resources from those who need them most.”
Despite the policy announcement, Alexander’s speech was labelled as “lacklustre” by Sandra Gidley, an ex-LibDem MP who lost her Romsey and Southampton North seat in the election.
Writing on Twitter she said the speech was “strangely lacking in passion. Cannot believe some people stood at the end. Politeness?”.
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Readers' comments (11)
Anonymous | 20 Sep 2010 9:47 am
I wonder if Danny Alexander will instruct HMRC to conduct an enquiry into his using a loophole to not pay Capital Gains tax on sale of his propert
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Anonymous | 20 Sep 2010 10:01 am
Re anon @9.47
no he will not
as usual it will be one rule for us and another for them.
"Flipping" chancers
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Steve Laird | 20 Sep 2010 10:30 am
Danny Alexander is simply dreaming (or, more likely, posturing) if he thinks he can reduce tax avoidance. Apart from the sheer hypocrisy of the idea, coming from a politician, the tax system is now so complicated that "clever new tax dodges" don't require a lot of thought.
A simpler tax system would allow far fewer loopholes but I'm not holding my breath.
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Nemo | 20 Sep 2010 10:31 am
He couldn’t have done better if he was actually in the employ of one of the cantons (is he?) Yet another boost for Swiss real estate prices and relocation agents. There will be no one left in England soon but scroungers – problem is who will they scrounge off when all the wealth creators have been driven out?
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Crazy gang IFA member | 20 Sep 2010 11:08 am
I get the feeling this will, as usual, end up being a witch hunt for the many small legitimate businesses out there, who struggle with the Business rates (the biggest tax of all!!) and try and make a profit and are easy prey for the HMRC. Who they wont go after is the thousands of immigrants that have set up business over here as kebab houses and cafes's etc etc and employ other immigrants and do not register them for tax or NIC. I know for a fact that in Ealing HMRC have been told to back off as it would look like we are picking on this sector of society unnessarily
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David Rangeley | 20 Sep 2010 12:03 pm
No detail given! As regards those hiding money in offshore accounts, where has he been for the last few years? There have been 2 opportunities to disclose offshore accounts and pay the tax with minimal penalties, and many of the favourite tax havens have now entered into exchange of information agreements so that the machinery is already in place to track down offshore accounts and their UK-resident owners.
And what does he mean by 50% rate dodgers? If he thinks that there are still lots of people out there who are simply making false tax returns or incorrect accounts, again the machinery is already there to identify and prosecute them.
If he wanted to buy brownie points with the electorate he should have promised to increase the HMRC headcount to provide a better service and also to collect the £billions of unpaid tax that is already known about.
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Anonymous | 20 Sep 2010 12:17 pm
If the taxation system was fair and simple all would pay it. Other Countries would want to set up business here rather than move jobs away from the UK.
If everyone rich or poor paid 10% and no more - everyone would pay it, the revenue would be imense on that level, as currently most do not. There are the bottom rung who pay nothing and the top rung pay paractically nothing, its everyone in the middle who pay as usual.
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Anonymous | 21 Sep 2010 7:52 am
Glad to see the continuing abuse of the word "avoidance". To equate it with benefit fraud (criminal offence) is just hyperbole again.
According to HMRC's own figures personal avoidance accounts for 2.5% of the total tax gap. There is a further 3% at a corporate level. i.e. of the £40 billion shortfall £3billion is avoidance. The remainder is either deliberate or accidental evasion.
Even some of the items classified as evasion are dubious as they are (e.g.) perfectly legitimate uses of the trans-european purchasing every EU citizen is allowed to do - e.g. buying cigarettes/alcolhol in lower duty jurisdictions in Europe.
That aside we should encourage reclamation of evasion as this is a criminal activity.
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Anonymous | 21 Sep 2010 7:52 am
Glad to see the continuing abuse of the word "avoidance". To equate it with benefit fraud (criminal offence) is just hyperbole again.
According to HMRC's own figures personal avoidance accounts for 2.5% of the total tax gap. There is a further 3% at a corporate level. i.e. of the £40 billion shortfall £3billion is avoidance. The remainder is either deliberate or accidental evasion.
Even some of the items classified as evasion are dubious as they are (e.g.) perfectly legitimate uses of the trans-european purchasing every EU citizen is allowed to do - e.g. buying cigarettes/alcolhol in lower duty jurisdictions in Europe.
That aside we should encourage reclamation of evasion as this is a criminal activity.
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Anonymous | 21 Sep 2010 8:48 am
Reduce income tax across the board to 18% and hike VAT to 28%. Those who spend more (the wealthy) pay more and vice versa. Thats seems fair to me.
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