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Calling time on tax avoidance
Welcoming the publication yesterday (Monday) of the Treasury report by Graham Aaronson QC on measures to combat tax avoidance, TUC General Secretary Brendan Barber said:
'A general anti-avoidance rule would make it far harder for the super-rich to hide behind tax loop-holes and avoid paying their fair share of taxation. The TUC has long called for such a provision to be introduced and we urge the government to act on these proposals.
'Unfortunately, abuse of the UK tax system is widespread amongst major companies and wealthy individuals. At a time of austerity when ordinary people are so hard-pressed financially, it's morally wrong for ministers to tolerate corporate tax avoidance on such a grand scale.
'But we do have concerns the rule may make it too difficult to allow HM Revenue & Customs to effectively target those companies and individuals avoiding tax. It also won't apply to national insurance and stamp duty - an area where there is currently significant abuse of the tax system, which is depriving the public purse of millions of pounds.'
Areas of wider TUC's concern over the anti-avoidance rule include:
- The composition of the proposed advisory committee that will have oversight over the operation of the rule, and which will be actively involved in pursuing cases. There seems considerable risk that this committee will almost inevitably be drawn from the same tax profession that has been so good at promoting tax abuse in the first place.
- The requirements regarding the burden of proof. It seems that in all cases likely to relate to large business, the burden of proof before this rule can be used has been placed on HM Revenue & Customs, but in the only area where it is likely to apply to small business, the burden of proof has been placed on the taxpayer. The TUC thinks this is unreasonable and likely to lead to injustice.
NOTES TO EDITORS:
- In 2008 the TUC published The Missing Billions, a report by tax specialist Richard Murphy which revealed that the public purse loses £13bn a year through tax avoidance by the wealthy and £12 bn a year through tax avoidance by corporations.
- All TUC press releases can be found at www.tuc.org.uk
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