Today in parliament Labour MPs set out the measures we will take to tackle tax avoidance in the first months of a Labour Government.
With campaigners and NGOs backing calls for a “Tax Dodging Bill”, Labour’s first Finance Bill will act to tackle tax avoidance. Labour set out the measures in an Opposition Day Debate today (Wednesday).
Labour’s motion today notes that just one out of 1,100 people who have avoided or evaded tax have been prosecuted following the revelations of malpractice at HSBC bank, which were first given to the government in May 2010.
It also calls upon Lord Green and the Prime Minister to make a full statement about his role at HSBC and his appointment as a Minister in 2011.
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
Scrapping 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 Balls MP, Labour’s Shadow Chancellor, said today:
"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.”
Shabana Mahmood MP, Labour’s Shadow Exchequer Secretary, said:
“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.”
The full text of Labour’s motion is:
That this House notes with concern that following the revelations of malpractice at HSBC bank, which were first given to the government in May 2010, just one out of 1100 people who have avoided or evaded tax have been prosecuted; calls upon Lord Green and the Prime Minister to make a full statement about his role at HSBC and his appointment as a minister; regrets the failure of the Government’s deal on tax disclosure with Switzerland which has raised less than a third of the amount promised by Ministers ; welcomes the proposals of charities and campaigning organisations for a Anti-Tax Dodging Bill; and further calls on the Government to clamp down on tax avoidance by introducing a penalty regime for the General Anti-Abuse Rule, which is currently too weak to be effective, closing the Quoted Eurobonds exemption loophole, ensuring that hedge funds trading shares pay the same amount of tax as other investors, introducing deeming criteria to restrict false self-employment in the construction industry, and scrapping the shares for rights scheme which the Office for Budget Responsibility has warned could cost £1bn in avoidance.