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Cameron pledges global crackdown on tax avoidance

David Cameron

Prime minister David Cameron has promised a global crackdown on aggressive tax avoidance as part of the UK’s leadership of the G8 in 2013.

Speaking at the World Economic Forum in Davos today, Cameron hit out at the “travelling caravan of lawyers, accountants and financial gurus” who arrange avoidance schemes in different countries.

Cameron said while evasion is illegal, some forms of avoidance raise “ethical” issues and firms who do it must “wake up and smell the coffee” about public opinion.

He said: “This is an issue whose time has come. After years of abuse, people across the planet are calling for more action and most importantly, there is gathering political will to actually do something about it.

“There is nothing wrong with sensible tax planning – and there are some things Governments want people to do to that reduce tax bills, such as investing in pensions, start-up businesses or charities.

“But there are some forms of avoidance that have become so aggressive that I think it is right to say – these raise ethical issues – and it is time to call for more responsibility and for Governments to act accordingly.

“Any businesses that think they can carry on dodging their fair share or can keep on selling to the UK and setting up ever-more complex tax arrangements abroad to squeeze their tax bill right down. Well, they need to wake up and smell the coffee because the public that buys from them have had enough.”

Cameron said he will also focus on Government transparency and free trade,with a particular focus on creating an EU-US free trade agreement, claiming it could add £50bn annually to the EU economy.

Yesterday Cameron pledged to hold a referendum on Britain’s membership of the EU by 2017, and plans to renegotiate the UK’s position over the next five years.


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There are 5 comments at the moment, we would love to hear your opinion too.

  1. Sad isn’t it when those who are supposed to be educated and consider themselves fit to govern can’t tell the difference between avoidance and evasion.

  2. @ Felix Godwyn

    I’d suggest that most politicians do know the difference but that they have sensed (righly in my opinion) that there is political capital to be earned from conflating the two.

  3. I take it this is going to affect Conservative party contributors like Baron Ashcroft who has been heavily criticised in the past for his aggressive tax avoidance which is probably cost the UK government many millions of lost revenue. I suspect not!

  4. Aggressive tax avoidance is probably a worse ‘crime’ than actual evasion, at least in the eyes of Joe Public.

    Anyway, although Starbucks really did wake up and smell the coffee, don’t expect the likes of Amazon or eBay to do likewise because these multi-nationals have an effective monopoly in their respective domains.

    Cameron cannot really pull any levers with Internet based businesses, as Gordon Brown found out when he tried to tackle gambling … they simply relocated to Gibraltar etc.

    Cameron and his successors will still be relying on over 50% of their tax revenues coming from the biggest-mug-of-all-time, the bog standard PAYE taxpayer (of England).

  5. If the system wasn’t so b….y complicated in the first place and seen to be fair, there would be little scope or need for so-called aggressive avoidance.

    If Mr C doesn’t like the people who play according to the rules, then he has ample chance to change the rules.

    I heard that his father had an off-shore avoidance vehicle. If it’s true, is the PM going to stop that too?

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