Tackling tax avoidance at home
- As the coalition sorts out Labour’s economic mess, Lib Dems in government are increasing revenues by clamping down on aggressive tax avoidance and evasion. It’s not fair that when most are making a contribution to balancing the nation’s books, a minority are escaping their duty.
- A model of the Lib Dems’ targeted General Anti-Avoidance Rule (GAAR) is now in operation. It is targeted at abusive and artificial avoidance schemes, preventing cat and mouse games which occur when new schemes are created every time the Government blocks an existing loophole.
- Lib Dems are investing more than £1 billion in HMRC to tackle tax avoidance and evasion and expect it to deliver £22 billion in 2014/15, £10 billion more than Labour managed in their last year.
- Lib Dems are increasing the number of HMRC staff working on tax evasion and tax avoidance by 2,500. Labour let the number of staff drop by 9,000 between 2005 and 2010.
- Danny Alexander has introduced procurement guidelines to ensure that the companies who take on Government contracts above £5 million self-certify compliance with their tax obligations. If they get involved with avoidance, they risk losing access to government business.
- In April this year, Liberal Democrat Business Secretary Vince Cable announced plans for a list of true company owners because for a company to be trusted, Lib Dems need to know who is really in charge. UK companies will no longer be able to use complex structures and trails of paper to hide information behind bogus owners and directors.
Tackling tax avoidance abroad
- Lib Dems think it is important that the UK takes a leading role in helping other countries to legislate against tax dodging.
- Lib Dems are supporting tax capacity projects to help developing countries increase their tax revenues. We’re working with international organisations such as the African Tax Administration Forum, the World Bank and the OECD to provide technical assistance.
- Last year, Lib Dems announced almost £10 million of new funding to support projects to tackle tax avoidance in developing countries.
- At last year’s G8 summit, the UK reached an agreement with other major countries to establish the automatic exchange of information between tax authorities. The UK Crown Dependencies and Overseas Territories have also joined up to this initiative, which will boost our ability to tackle cross-border tax evasion.
- In January this year, the Treasury announced that it had received £340 million from the Swiss Government following an agreement Lib Dems made with them to tackle tax avoidance.