UK Tax Avoidance Crackdown On Track

By ExpatBriefing.com Editorial 27 September, 2012

The UK is on track to raise an additional GBP4bn (USD6.5bn) in revenue from crackdowns on tax avoidance this year alone, the Chief Secretary to the Treasury Danny Alexander has said.

Alexander unveiled the figure in a speech at his party conference, where he spoke of the need for "fairer taxes in tough times". The government's aim is to claw back an additional GBP7bn a year in revenue from anti-tax avoidance activity by 2015, using over GBP900m to fund the crackdown.

Alexander referred to three main types of tax avoidance in his speech and outlined the steps taken by the government to combat each. Domestically, a key focus has been on the UK's high net worth individuals, with HM Revenue and Customs (HMRC) setting up a new affluent unit last year. According to Alexander, the unit is already a success, raising GBP44m in less than a year. He announced that the government now plans to build on this success, and will expand the unit's remit to the wealthiest 500,000 people in the country, covering those with net wealth over GBP1m.

Steps are also being taken to ensure that public sector workers are no longer paid in a way that potentially enables them to pay too little tax, Alexander claiming credit for having shut down a loophole that allowed them to do so. He also wants similar rules to apply to companies doing business with the government, specifically the large companies receiving taxpayers’ money to deliver a service. According to Alexander, there is currently nothing to prevent the small minority of companies who do not adhere to the rules from winning government contracts. Alexander has asked HMRC and the Cabinet Office to set out a workable solution to this problem. The government will release more details later in the year.

Alexander also turned to the use of overseas tax avoidance schemes. He referred to those "hiding their assets offshore" and warned that the government would find them and ensure that they pay their "fair share". The UK will double the size of its anti-avoidance team working on Liechtenstein, with the hope that it can triple its tax take from the Liechtenstein Disclosure Facility (LDF). The LDF offers a time limited opportunity to those with unpaid tax linked to investments or assets in Liechtenstein to settle their tax liability with the UK. The scheme, launched in 2009, had been intended to raise GBP1bn but Alexander said that the government expects that by enlarging its work force, it can now raise GBP3bn.

Tags: Individuals | Expatriates | Tax | Investment | Business | Tax Avoidance | Public Sector | Law | Banking | Liechtenstein | United Kingdom | Offshore | Tax Planning |

 





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