McDonnell publishes 10-point plan for tackling tax avoidance

Labour has renewed pressure on the Government over the leaked Panama Papers by publishing an expanded set of demands for tackling tax avoidance.

John McDonnell has repeated his call for a public inquiry over the revelations of a super-elite taking ultra-complex measures to cut their tax bill.

The shadow Chancellor has published a ten-point plan, embracing increased powers for HMRC and EU-wide deal for multinational firms to adopt country-by-country tax reporting, as he tried to pin the blame for the scandal more closely on David Cameron and George Osborne.

McDonnell described the furore as a leadership issue for Cameron, who has been battered by the disclosure that he benefited from an offshore fund set up by his late father, and Osborne, who has been dogged by the emergence of a BBC clip from 2003 in which he recommended the use of “clever financial products” for families to cut their inheritance tax liabilities.

“This is a test of leadership”, McDonnell said in an opposition day debate in the House of Commons.

“The leadership of the [Tory] party opposite could take this opportunity to correct the series of errors it has made.”

McDonnell published a tax transparency enforcement programme in which he demanded:

• A public inquiry to examine the loss of tax revenue and consider reform proposals.
• Forcing MPs to publish details of all their offshore holdings.
• Increased powers for HMRC including a “specialised tax enforcement unit” and a doubling of the number of staff looking at the wealthiest individuals and firms.
• Forcing foreign firms to list their owners and beneficiaries if they are bidding for public sector contracts.
• Negotiating an EU deal to force multinational firms to file public reports on their dealings, country by country, and to protect whistleblowers.
• The introduction of a General Anti-Avoidance Principle and the extension of current rules to cover offshore abuses.
• Cracking down on accounting tricks, including telling courts to ignore “artificial steps” inserted in transactions to try and reduce tax.
• Working with banks to uncover who owns the companies and trusts they work with.
• Introduce minimum standards on transparency for crown dependencies and overseas territories like the British Virgin Islands – where more than 100,000 Panama Papers firms were based. 
• Drawing up plans for a register of trusts which transfer trustees’ residence offshore.