I’ve had a lot of correspondence about Tax Dodging and thought it might be helpful to share my response more widely.
Letter to constituents:
The vast majority of people and businesses in the UK pay their taxes on time and in full, but there are always some who try to get away without paying their fair share. This is morally wrong and damages our economy and public finances. I have voiced my feelings on these matters on my website, here: https://judithbunting.co.uk/2015/02/13/taxation-is-payment-for-services-rendered and here: https://judithbunting.co.uk/2014/12/03/its-paying-tax-that-is-the-moral-duty/.
In government, the Liberal Democrat Chief Secretary to the Treasury, Danny Alexander, and Vince Cable in BIS have been tackling tax avoidance as a top priority. They have made progress on many of the issues you raise. Since coming into Government in 2010 he has led a crackdown on tax avoidance and evasion that is closing loopholes and making more people pay up. I remember hearing Vince Cable talking about his determination to close loop holes in 2010 and am really pleased that he’s been able to follow through on many levels. The changes made include:
- the introduction of a General Anti-Abuse Rule (GAAR), which goes much further than the current anti-abuse rule and is well on the way to being the kind of Tax Dodging Bill you are after;
- strengthening the Disclosure of Tax Avoidance Schemes (DOTAS) regime;
- introducing a tougher monitoring regime and penalties for high-risk promoters of tax avoidance schemes;
- investing almost £1bn in HMRC to tackle tax avoidance and giving them the power to collect disputed tax bills up front (thus removing the incentive for tax avoiders to delay and frustrate HMRC’s efforts to settle disputes)
- recruiting 2,500 extra members of staff to work on tackling tax avoidance
- opening a new Large Business Directorate last year to deal specifically with the tax affairs of the 2,100 largest firms in the UK.
- There is clearly much more to do at home and abroad, but I am proud of the work that Liberal Democrats have done in Government to close loopholes and force tax cheats to pay more of their fair share. Thanks to the steps we have taken, the tax yield for this year, alone, will be around £9bn more than when we came into Government in 2010.
Our party is determined not to let up in the fight against tax cheats. If we are in Government again our aim is to make progress on this agenda in every Budget and every Autumn Statement of the next Parliament.
We will continue to invest in HMRC, as we have done in Government, to enable them to do more to tackle tax evasion and avoidance. We will also introduce a range of other measures, including a General Anti-Avoidance Rule, which goes even further than the current anti-abuse rule.
I understand the Government has also taken specific action to get back money lost in Swiss bank accounts. HMRC is working systematically worked through all the HSBC data that it has received and has so far brought in more than £135m in tax, interest and penalties from tax evaders who hid assets in Swiss HSBC accounts.
It’s not enough, though. We need a shift in society to see taxes as payment for services rendered, rather than some kind of penalty. Do please pass that message on to your friends and neighbours.