LABOUR has vowed to get tough on aggressive tax avoiders by doubling the penalties for those caught flouting the rules.
That’s the no-compromise stance outlined by shadow chancellor Ed Balls who said a Labour government would double the penalties for those ensnared by the HMRC’s General Anti-Abuse Rule (GAAR).
It would impose fines of up to 100% of any unpaid tax, effectively doubling the amount owed. Currently, anyone caught using abusive avoidance schemes simply have to cough up the amount of tax they should have paid without any additional penalty.
Balls said: “Tackling tax avoidance is a key part of our economic plan. A fair and robust tax system is vital if we are to bring down the deficit, safeguard our National Health Service and maintain public support for the dynamic open economy we need.
“At the moment, we are going in the wrong direction. The amount of uncollected tax – the so called ‘tax gap’ – rose again to £34bn in the latest year on HMRC’s own estimates. It’s up by £3bn under this government and tax campaigners have suggested the true figure could be much higher.
“That is why Labour will bring in a tough penalty regime for the GAAR, with fines of up to 100% of the value of the tax which was avoided. For the first time this will provide a tough and genuine deterrent to those who try to abuse the system and avoid paying their fair share of tax.”