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Only Labour will tackle Tax Evasion

Over the last few days I have been sent numerous emails from Wyre Forest residents concerned about the recent revelations about tax evasion. I share these concerns about tax dodging as I believe that taxes are the price we pay for a decent society. I think it is unacceptable that big companies (aided by the banks) can avoid paying taxes when ordinary citizens cannot afford the expensive accountants and lawyers which are able to exploit loopholes.

Especially in an era of austerity it is vital for everyone to pay their fair share of taxes so that the cuts to vital public services is minimised. Labour has already pledged that it would not allow any further cuts to HMRC as they need to be given the resources to do its job properly. It is an indication of this government priorities that in 2012 there were 3250 staff at the Department of Work and Pensions investigating benefit fraud of £1.2bn but only 300 staff investigating tax evasion of more that £70bn. Labour would strengthen the General Anti-Abuse Rule, ensure greater transparency of taxes paid in the UK and carry out a fundamental reform of the corporate tax system to ensure that all companies that make profits in the UK pay tax.

With campaigners and NGOs backing calls for a “Tax Dodging Bill”, Labour’s first Finance Bill will act to tackle tax avoidance.  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. The next Labour Government will act where the Tories have failed.

We will close loopholes that cost the Exchequer billions of pounds a year, increase transparency and toughen up penalties. And we will act in our first Finance Bill. Labour 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.
Ed Miliband has also warned the tax havens costing British families and businesses billions of pounds that they will have just six months to put their house in order and open their books - or face being placed on an international blacklist. Despite David Cameron boasting more than 18 months ago that he had forced tax havens to open up, not one of the tax havens linked to Britain as Overseas Territories or Crown Dependencies have yet delivered on Cameron’s promise that they would publish a register showing who owns the companies registered there – and some have explicitly refused to do so.

The lack of leadership shown by the UK government has frustrated and slowed the pace of reform on tax avoidance across the world. There is nothing pro-business about defending tax avoidance. The United Kingdom has a responsibility to open up the Overseas Territories and Crown Dependencies which are held responsible for so much tax secrecy and avoidance. And it is costing everyone who relies on our schools, our hospitals, our roads and our railways. It is costing everyone who pays their fair share of taxes, including millions of British businesses.

In a letter to heads of government of Britain’s overseas territories, Ed Miliband served notice on them that under the next Labour government they will have six months to publish publicly accessible central registers of beneficial ownership. If they fail to meet this deadline, the next Labour government will withdraw the protection they get from international scrutiny and ask the Organisation for Economic Co-operation and Development to place them on its tax haven blacklist.

At the end of the day the Tories will not tackle tax evasion because they are bankrolled by the very people who benefit from the loopholes and evasion schemes. Instead they are happy to demonise those on benefits rather than actually deal with the issue. Only a Labour government will really tackle tax evasion.

Dr Matt Lamb, Labour Parliamentary Candidate for Wyre Forest.

Promoted by Jerry Bartlett on behalf of Dr. Matt Lamb both at Wyre Forest
Labour Party, Paddington House, New Road, KIDDERMINSTER DY10 1AL

 

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