Lib Dems announce coalition clampdown on tax evasion
The Lib Dem conference (which I am not at, because I have enough Lib Dem in my life at home without needing to go to Liverpool to get more) is bigger than ever. And today we used the occasion to launch the biggest ever clampdown on tax evasion, which will raise £7bn a year.
The Lib Dem Chief Secretary to the Treasury Danny Alexander has announced plans to crack down on offshore tax havens and other tax “dodges” which he has said are “morally indefensible.”
And it’s about time too. Not for the coalition, which has got onto this six months, but for governments in general which have had decades to do something about this, but have failed.
Mr Alexander compared tax evaders to benefit cheats, and I agree. Something that was bad now desperately needs sorting so that the richest don’t avoid paying their share in the deficit reduction plan. The plan will see an extra £900m for the “ruthless” pursuit of tax evaders and those who use legal loopholes to minimise their tax bills. There will now be a dedicated tam of investigators, with the aim of having five times as many prosecutions for tax evasion as there are now.
Mr Alexander said “There are some people who seem to believe that not paying their fair share of tax is a lifestyle choice that is socially acceptable. We will be ruthless with those often wealthy people and businesses who think they can treat paying tax as an optional extra. Just like the benefit cheat, they take resources from those who need them most. Tax avoidance and evasion are unacceptable in the best of times but in today’s circumstances it is morally indefensible.
The estimated additional income to the Treasury of £7bn a year by 2015 is equivalent to the total income tax and National Insurance paid by more than one million workers. Here’s hoping the plan works.
Rick
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September 19th, 2010 at 5:26 pm
Excellent news!! Tax Evasion is something that the last Labour Government failed to address adequately (in fact, hardly at all). It’s illegal, it’s immoral, and it must be curtailed. So long as the amounts recouped are more than the costs of pursuing the guilty parties, it is definitely a worthwhile policy.
Tax Avoidance is a quite different animal though, because however immoral it might be, it is still perfectly legal. In fact, simply because it is legal, Vince Cable was visibly squirming over the issue, when interviewed on The Politics Show, earlier today. Maybe there’s a good reason why he was not quite sure of what to say. You see, sadly, there is an Elephant in the room…
One of the “top businessmen” in a group (The Tax and Competitiveness Forum) appointed by George Osborne to advise the Treasury on company tax issues, is one Andy Halford. Mr Halford is the Chief Financial Officer at Vodafone. Vodafone are the company that, just last week, managed to avoid a UK Treasury Tax Liability of £6bn, by selling its’ shares in China Mobile through Vodafone Holdings (Jersey) Ltd. But all perfectly legal. HMRC having already accepted that the £6bn is not coming their way, it’s no wonder that they won’t write off the £2bn they’ve undercharged the rest of us, by their own incompetence.
Against such a background, the Coalition Government has its’ work cut out. It may well require Legislation, which might be difficult to formulate adequately, and also be time-consuming. Very time-consuming in fact, because it’s more than likely that, whatever the Coalition Government might say about it, certain Conservative Back-Benchers won’t be rushing to help, and I guess the Lobbyists are getting busy at this very moment!
But, if it does something about the grotesque behaviour of the Lord Pauls and Lord Ashcrofts in our society,and stops the activities of the “Do as I say, not as I do” brigade, it can only be good for the nation.
So… Bona Fortuna!! (Or, in this case, it’s probably more apt to say Res Secundae)!!!
Look ‘em up for yourself!
September 20th, 2010 at 11:54 am
Excellent – but it seems some people have qualms about the potential use of lie detectors as part of the package. We are all used to the call centre refrain that your call may be recorded for training purposes. Callers to HMRC might soon be met be one that says ‘your call may be run through a lie detector’ !
Would that put us up or down the civil liberties league table I wonder ?
September 20th, 2010 at 12:51 pm
Is there a league table for civil liberties that includes such things? I wonder where we are in it after the last few years under Labour…
I also read the Daily Mail article about “lie detectors,” which was alarmist to say the least. The software isn’t a “lie detector” but it does, when used, highlight the possibility that people might be more nervous and hesitant than would be expected in a normal conversation with the HMRC. It won’t be used to prove guilt, merely as a primer for more investigation. Seems reasonable to me. It’s like looking for suspicious behaviour and investigating it, but without the advantage of actually seeing the subject! I don’t think it’s unreasonable.
September 21st, 2010 at 12:17 pm
Well Nick Clegg thinks they were eroded on an ‘industrial scale’. So there is way to go. We need industrial quantities back just to regain our position. I think that we are currently 14 in the world ( http://www.worldaudit.org/democracy.htm ) so I imagine we will soon be back on top with all the Coailition’s plans. If we were ever there – or things got as bad as rhetoric suggests.
September 22nd, 2010 at 10:01 am
From the Daily Telegraph – so it might not be exactly right :-
‘Last night Mr Alexander admitted that he took advantage of a loophole to legally avoid paying CGT on the sale of the south London property for £300,000 in June 2007′.
http://www.telegraph.co.uk/news/newstopics/mps-expenses/liberal-democrat-mps-expenses/7787519/Danny-Alexander-new-Treasury-chief-avoided-capital-gains-tax-on-house.html
So he is the equivalent of a benefit cheat ? And he is going to be pretty unpopular soon. I wonder when George Osborne will come out from behind his back
September 22nd, 2010 at 4:14 pm
I think the fact that it’s from the Daily Telegraph doesn’t make it any more or less likely to be right than if it came from any other paper…
I also think that the MPs expenses stories (of which this is one) made it pretty clear that the public saw lots of MPs as on a par with benefits cheats. In fact four of the worst ones are being tried for theft.
September 22nd, 2010 at 5:57 pm
But some thought the LibDems were different (I am not the same as those two – or Nick Clegg’s words to that effect).
And yet they seem to have appointed a hypocrite of the highest order to do one of the most difficult tasks in the country at present, and without it seems many obvious qualifications.
Strange world isn’t it.
September 23rd, 2010 at 4:56 pm
Very strange.
I think, genuinely, that if you look at a politician for long enough, and delve into every aspect of his life, then it is impossible not to find evidence of him being a hypocrite about something.
The same would probably be true of everyone, I suspect.
What’s wrong is wrong, of course. And his behaviour is wrong. But, weighed against his honest desire, and the honest desire of 99.9% of politicians, to make the country better in the way they believe in, it really isn’t as world-destroyingly terrible as the papers make out.
If only people were paid to delve into the financial affairs and personal lives of newspaper journalists… I suspect one or two charges of hypocrisy may follow.