View the article online at http://citywire.co.uk/money/article/a639342
Osborne promises £10bn tax dodging clampdown
The chancellor says he will put more resources into fighting tax dodging as MPs criticise the tax man for being 'way too lenient'.
The chancellor George Osborne is throwing more money at tax enforcement in a bid to gain up an extra £10 billion in revenues from the wealthy and big business.
In response to the growing public outrage over tax dodging the chancellor will announce in his Autumn Statement on Wednesday that he will spend a further £154 million over the next two years on measures to increase the tax take from multinationals and wealth individuals with Swiss bank accounts.
He will stop the practice of ‘transfer pricing’ where companies use legal loopholes to transfer sales in the UK to another country with a more favourable tax regime.
The Treasury believes stepping up enforcement will bring in £5 billion by 2015 and another £5 billion will be collected from Swiss bank accounts of the wealthiest over the next six years.
The move comes as Osborne prepares to tell the country that the government has fallen behind on its plans to eliminate the budget deficit.
Osborne said: ‘The government is clear that while most taxpayers are doing their bit to help us balance the books, it is unacceptable for a minority to avoid paying their fair share, sometimes by breaking the law. We are determined to tackle this problem and HM Revenue & Customs (HMRC) is making good progress but we are giving them additional tools to bring in more.’
His comments follow public outrage at Starbucks which has paid just £8.6 million in tax in the past 14 years despite generating sales of £3 billion. The coffee chain is now said to be 'in discussions' with HM Revenue & Customs over its tax arrangements.
Similarly, online retailer Amazon generated £3 billion of sales in the UK in 2011 but has paid no corporation tax.
A report by MPs on the Committee of Public Accounts has criticised HMRC and called for a 'change in mindset' towards corporate tax collection.
Margaret Hodge, chair of the Committee of Public Accounts, said: ‘The inescapable conclusion is that multinationals are using structures and exploiting current tax legislation to move offshore profits that are clearly generated from economic activity in the UK.’
She added: ‘HMRC should be challenging this but its response so far to these big businesses and their aggressive tax planning has lacked determination and looks way too lenient. Policing the tax system must be at the heart of what HMRC does.’
‘We consider that paying an appropriate amount of tax in the country in which profits are made is not only a matter of basic economics, it is also a matter of morality,’ said Hodge. ‘The UK should be taking the lead in making this point.’
Matthew Sinclair, chief executive of lobby group TaxPayers’ Alliance, said it was natural for taxpayers to be angry but that an overhaul of the tax system was needed to make it fairer and more effective. 'Draconian punishments for arrangements which the law doesn’t specifically prohibit would be unjust and impractical. If politicians are serious about doing something then they need to reform the tax system.’
News sponsored by:
Here at BlackRock, we help investors make more out of commodities with a range of innovative, flexible and resilient investment strategies.
From Brazil and Mexico, to Vietnam and Nigeria, the rapidly developing economies of Latin American and frontier markets, which are some of the smaller, less developed economies in the world, provides investors with a wealth of potential opportunities. Discover why BlackRock's investment trust range is well placed to help you make more of these exciting regions.
In this guide to investment trusts, produced in association with Aberdeen Asset Management, we spoke to many of the leading experts in the field to find out more.
More about this:
More from us
- Tax avoidance: is the tide turning?
- HMRC criticised over £10.2bn backlog of 41,000 avoidance cases
- Jimmy Carr apologises for tax avoidance but what is Cameron doing?
- Taxman takes on Take That in avoidance clampdown
- HMRC to gain new powers to get tough on tax avoidance
- Osborne 'shocked' by tax avoidance of super-rich
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add firstname.lastname@example.org to your safe senders list so we don't get junked.
by Daniel Grote on Sep 29, 2016 at 10:23