Cable brands tax avoidance 'corrosive'

Tax avoidance is ‘deeply corrosive of the ethical basis of taxation,’ the Lib
Dem shadow chancellor has said as he unveiled a package of anti-avoidance
measures at the party’s conference.

Plans to tax ‘golden goodbyes’ are among the package of anti-avoidance
measures claimed to be worth £5billion annually

Vince Cable spelled out his proposals at a packed fringe gathering sponsored
by the ICAEW in Bournemouth.

Cable said he would welcome accountants’ advice on his proposals but made it
clear that he is opposed to wealthier taxpayers using professional advice to
avoid paying taxes intended to be due, labelling avoidance ‘deeply corrosive of
the ethical basis of taxation’ and making clear some ‘retrospection’ is
inevitable.

He said the ‘golden goodbye’ crackdown would use general anti-avoidance
provisions to prevent ‘disgraced former heads of business’ subject to ‘de facto
firing’ from claiming the redundancy exemption and structuring their payouts to
benefit from other loopholes.

His package also includes:

• banning the use of special vehicles and offshoring to avoid paying stamp
  duty on property transactions;
• ending venture capital trusts and enterprise incentive schemes which Cable
  claimed do not actually encourage innovative and entrepreneurial activity;
• aligning capital gains tax with income tax;
• imposing an investment income surcharge to treat unearned income on the same
  basis as earned income; and
• ending the £30,000 ‘poll tax’ on non-doms, restoring non-dom status for
  foreigners working in the UK for up to seven years and taxing them as British
  residents on all their income thereafter.

ICAEW technical committee head Francesca Lagerberg, from Grant Thornton,
warned representatives ‘fairness’ was an inadequate criteria for tax policy
because it meant different things to different audiences and urged
‘reasonableness’, ‘proportionality’ and ‘certainty’ should be considered as
well.

The ICAEW has organised a series of meetings at all three party conferences,
some in private with senior members of the government and the Conservative
leadership as well as delegates.

Some of the Big Four are also intervening at the Labour and Tory conferences
in a bid to influence the political agenda on issues well beyond accountancy.

Lagerberg later warned the government has not consulted widely enough on
proposals expected in the autumn statement designed to stop ‘income shifting’
between husbands and wives in small businesses and urged a ‘reality check’ to
ensure proposals ‘do what it says on the tin’ and do not have unintended
consequences.