Labour’s crackdown on tax avoidance
The Labour party have pledged to crack down on tax avoidance to raise an ambitious £7.5bn annually, according to their manifesto.
Ed Balls, the Shadow Chancellor stated should the Labour party be elected by the public, it will crack down on tax avoidance immediately by closing tax loopholes and increasing fines for tax avoidance.
In the first week under Labour rule, a draft Finance Bill will be set out, to deliver Labour’s ten point plan.
The proposals set out by Labour would include HMRC and the Chancellor being summoned before parliament every year to discuss the target set of bringing in £7.5bn annually, which Mr Balls stated should be achieved half way through the government’s term.
Labour also intends to review the systems for collecting tax and assess HMRC’s current powers.
The Shadow Chancellor stated:
“We will close loopholes the Tories won’t act on, increase transparency, toughen penalties and abolish the non-dom rules. And our first budget will make sure that following an immediate review of HMRC, it has the powers and resources it needs to come down hard on tax avoidance and evasion”.
The ambitious amount of £7bn has attracted staunch criticism, with critics stating there are no details on how this will be achieved.
Labour’s Ten point plan
Labour’s ten-point tax plan includes:
- abolishing the non-dom rules;
- re-writing the carry interest rules;
- closing stamp duty loopholes relating to hedge funds;
- mandating the UK’s Overseas Territories and Crown Dependencies to produce publicly available registries of beneficial ownership;
- increasing penalties for tax avoidance including new penalties for those who are caught by the General Anti-Abuse Rule (GAAR).
- scrapping the Shares for Rights scheme;
- tackling disguised self-employment by introducing strict deeming criteria;
- tackling the use of dormant companies to avoid tax by requiring them to report more frequently;
- close Eurobonds loophole which allow some large companies to move profits out of the UK and avoid Corporation Tax
- making country-by-country reporting information publicly available.
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