Britain goes to the polls: the tax avoidance election

   1   0 Blog, Corporate Tax
Tax dodging

The message is getting through. The policies may not be

An interesting thing about the forthcoming UK election is that the subject of ‘tax avoidance’ has risen up the agenda so far and so fast. This guest blog briefly reviews the main parties’ manifestos, with a look out for their uses of the term.

[We should add, by the way, that ‘tax avoidance’ is a tricky term to use, and is often wrongly used, as David Quentin has reminded us. We prefer terms such as ‘tax cheating’ which sidestep tricky questions of legality.]

The UK’s Tax Avoidance Election

By Dan Hind

The Conservatives have said that they will ‘crack down on tax evasion and aggressive tax avoidance’. They claim that they ‘will raise at least £5 billion’ by doing so. Their manifesto includes 4 mentions for ‘tax avoidance’, up from 0 in 2010.

Labour have said that they will create a ‘fairer tax system’ by closing loopholes, imposing tougher penalties, reviewing the culture and practices of HMRC. They also pledge to introduce country-by-country reporting, unilaterally if necessary. Meanwhile, ‘British Overseas Territories and Crown Dependencies will be required to produce publicly available registries of the real owners of companies based there.’ There are 4 mentions of ‘tax avoidance’ in their manifesto, up from 1 in 2010. Labour has committed to end non-domicile status.

The Liberal Democrats pledge to introduce a general avoidance rule, to set a target for HMRC ‘to reduce the tax gap’ and to invest in staff. The also propose creating a new crime of ‘failure to prevent economic crime, including tax evasion’. They say that they will levy penalties on ‘firms proven to facilitate tax evasion, equivalent to the amount of tax evaded by their clients’. They want to ask the Bank of England to include how banks handle tax in their assessment of risk in the financial sector and they will restrict access to non-domicile status. There are 9 mentions in the 2015 manifesto, up from 3 in 2010.

UKIP say that ‘the public has every right to be angry’ that ‘that a few multi-national corporations have been able to access all the benefits of our thriving British consumer market without making a proper contribution to the costs of British society. Thy say they will restore ‘British tax sovereignty’ and ‘end the practice of businesses paying taxes in whichever EU or associated country they choose’. They will also set up a Treasury commission to ‘to monitor the effectiveness of the new Diverted Profits Tax and bring in any further measures necessary to prevent large multinational corporations using aggressive tax avoidance schemes.’ They mention tax avoidance once, up from 0 in 2010.

The Greens (England and Wales) commit to automatic information exchange and the abolition of non-domicile status. They also say that they will ‘consider making the £2 billion industry of designing, promoting and selling tax avoidance schemes illegal’. They want to ‘consider’ introducing a Land Value Tax and they say that they are part of a movement seeking to establish a global wealth tax. As part of their policy offering for foreign aid they propose to ‘take real action to end tax evasion and avoidance and transfer mispricing by transnational corporations, which steals resources especially from poorer countries’ and ‘support global efforts to develop a fairer global tax system’. They mention tax avoidance 9 times, up from 1 in 2010

The SNP support ‘calls for a global fair tax summit to agree international measures to tackle tax abuses’ and ‘will back measures to tackle tax avoidance, including early legislation to address tax dodging and an increase in staff resources at HMRC.’ They will also ‘put forward measures to strengthen anti-avoidance law across the UK to ensure it is as strong as new Scottish legislation’ They too plan to abolish non-domicile status. They mention tax avoidance 4 times, up from 0 in 2010.

Notes

Both UKIP and the Conservatives always preface ‘tax avoidance’ with the word ‘aggressive’ in their manifestos.


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One thought on “Britain goes to the polls: the tax avoidance election

  1. Pauline Bulley says:

    Hi. WHEN WE HEAR TAX AVOIDANCE WE AUTOMATICALLY THINK HOW IS IT POSSIBLE THAT SO MANY PEOPLE GET AWAY WITH PAYING THEIR TAXES AND ASSUME THEY ARE MILLIONAIRES.

    NOT TRUE. MY HUSBAND IS ONE OF MANY THOUSAND OF CLIENTS WHO SIGNED UP TO CONSULTING OVERSEAS.

    IN 2014, AFTER 12 YEARS OF COURT APPEALS, CONSULTING OVERSEAS LOST.

    AS ONE OF THEIR CLIENT WE HAVE A TAX DEBT OF £40,000. £25,000 TAX AND £15,000 INTEREST. WE HOLD OUR ARMS UP AND SAY YES WE WILL PAY OUR DEBT.BUT CAN ONLY AFFORD A SMALL MONTHLY SUN TO HMRC. HMRC SAID THAT THIS WAS NOT ACCEPTABLE.

    WE EXPLAINED WE HAD AN OUTSTANDING DEBT FOR £130,000 (DUE TO MY GAMBLING ADDICTION AND MENTAL HEALTH PROBLEMS) PLUS AN OUTSTANDING MORTGAGE FOE £95,000,

    THE ONLY WAY WE CAN PAY HMRC IS BY SELLING OUR HOME WHICH WILL MAKE US HOMELESS. HMRC WAS NOT INTEREST AND SAID THAT IF WE DONT PAY BY OCTOBER 2015 THEY WILL START BANKRUPT PRICEDURES.

    WE HAVE TRIED TO GET ADVICE IF HMRC CAN FORCE US TO SELL OUR HOME WHEN WE ARE PAYING AT THE MOMEMT £50 A MONTH TO THEM. MR GRAHAM BRAMMER AT HMRC HAS WRITTEN TO US AND SAID THAT WE WOULD NOT BE GIVEN ANY EXTRA TIME TO PAY.

    MY HUSBAND ENQUIRED ABOUT CASHING IN HIS PENSION BUT NOW THE GOVERNMENT HAVE MOVED THE GOALPOST TO 2017 IT WILL BE TOO LATE FOR US.

    THANK YOU FOR TAKING TIME TO READ OUR MESAGE.

    KIND REGARDS MRS P BULLEY

    MR GRAHAM BRAMMER IS OUR CONTAC

    I

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