As a local businessman who has worked hard my whole life I know how difficult it feels to pay the tax due on our income, only to watch as other far wealthier people appear to be able to avoid paying their fair share.
However, this Government, led by my Conservative colleagues has been addressing this issue for the past 5 years. In fact we have done far more to close the tax loopholes that are being exploited than the previous Government did during their 13 years in power.
I am someone who believes passionately in low taxes – hard working people should be allowed to keep as much of the money they earn as possible to decide what they wish to spend it one. But I also believe these taxes should be paid. I am pleased that this Government is making sure everyone pays the taxes that they owe – securing a stronger economy and a better future for Britain.
We have cut taxes as a key part of our long term economic plan to build the most competitive corporate tax system in the world – but not everyone is paying their fair share.
That’s why we’re tackling aggressive tax avoidance and evasion – of both some large companies and individuals. We have led the world on changing international tax rules and are implementing those changes in Britain. We have gone further than any previous government, closing more of the loopholes we inherited every year, and raising £85 billion in compliance activity. We are committed to recouping an additional £5 billion by clamping down in the next parliament at the same rate as in this parliament.
• HSBC’s tax arrangements. It is for HSBC to explain what they did to ensure their clients complied with tax law. Since 2010 we have closed many of the loopholes exposed and specifically taken action to get back money lost in Swiss Bank Accounts. We have systematically worked through the 2010 ‘Lagarde’ list of tax avoiders and brought in more than £135 million, increasing the maximum penalty for hiding money in tax havens to 200 per cent of the tax evaded. Over 90 countries last year signed up to new international Comprehensive Reporting Standards, further shutting down the options for tax cheats who pursue this increasingly high risk practice. To date our agreements with Switzerland and Liechtenstein alone have brought in around £2 billion in previously unpaid tax.
• Cracking down on aggressive avoidance and evasion in Britain. We have made over 40 changes to tax law, closing down loopholes and introducing major reforms to the UK tax system. In particular, we have introduced a General Anti-Abuse Rule which will deter the creation of abusive tax avoidance schemes, clamped down on Stamp Duty avoidance with an Annual Tax on Enveloped Dwellings and we’ve stopped hedge fund managers using partnerships to avoid paying tax on their income.
• Tackling aggressive avoidance and evasion internationally. We have led efforts within the G20 to reform the international corporate tax rules through the OECD Base Erosion and Profit Shifting (BEPS) project and the Prime Minister put tax transparency at heart of his presidency of the G8, promoting the development of automatic information exchange. This standard was developed over the last two years and now, thanks to UK leadership, over 90 countries – all major financial centres (including Switzerland), all the G20, all the EU and all of the Crown Dependencies and Overseas Territories – have committed to begin exchanging this information by 2018.
• Making sure multinationals pay their fair share – tackling the so-called ‘Double Irish’. Some of the largest companies in the world use elaborate structures to avoid paying tax. To make sure they contribute we’re introducing a 25 per cent tax on multinationals’ profits where they’re artificially shifted out of the country. This will raise over £1 billion over the next five years.
• Investing in HMRC to deal with aggressive avoidance and evasion. We have invested £1 billion in HMRC since 2010 to tackle tax avoidance, evasion and non-compliance. HMRC have recovered more than £31 billion in tax as a result of interventions with large businesses since 2010. HMRC’s High Net Worth Unit has collected £852 million from the UK’s wealthiest people. Between 2010-11 and the end of March 2015, HMRC will have collected more than £100 billion in additional compliance revenues.
• The amount raised from compliance has increased to a record high under this Government and the tax gap has been reduced. It is forecast HMRC will raise £26 billion this year from compliance, £9 billion more than in 2010. The tax gap has fallen from 8.5 per cent in 2005/06 to 6.8 per cent in 2012/13.