Labour outline how they’d deal with tax avoidance

Through the means of an Opposition Day Debate, Labour are today outlining how they’d deal with tax avoidance in the first couple of months of government.

The party will point out that following information passed on to HMRC in 2010 that HSBC were helping client to avoid taxes, only one person out of 1,100 who avoided or evaded tax will be prosecuted.

They’ll also call on David Cameron and former HSBC boss, Stephen Green, who went on to become Trade Minister, to make statements about the latter’s role at HSBC and his time as a minister.

Labour will outline key measures to deal with tax avoidance, which will be included in their first Finance Bill if they’re elected in May. Among them are:

• Introduce penalties for those who are caught by the General Anti-Abuse Rule
• Close loopholes used by hedge funds to avoid stamp duty and loopholes like the Eurobonds loophole that allow some large companies to avoid Corporation Tax
• Scrap the “Shares for Rights” scheme, which the OBR has warned could enable avoidance
• Require dormant companies to report to HMRC more frequently to stop them avoiding tax
• Force the UK’s Overseas Territories and Crown Dependencies to produce publicly available registries of beneficial ownership

Ed Balls, Shadow Chancellor, has explained why these measures are so important and he has highlighted the Government’s failure on the issue:

“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.

“I am determined that 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.”

Meanwhile, Shabana Mahmood, Shadow Exchequer Secretary, has called on all parties to support Labour’s motion today, saying:

“The Tories and Lib Dems should back our motion tomorrow to show that they are serious about tackling tax avoidance and evasion. We have a clear plan for our first Finance Bill after the election – they need to back that or explain why they don’t.”