KERCHING! Ten steps to tackling tax avoidance
Tax avoidance happens when a person or company undertakes transactions whose main purpose is to save tax through loopholes and gaps in laws and regulations.
It's often claimed that tax avoidance isn't illegal, in contrast to tax evasion. But not being illegal is hardly the same as being legal.
It's hard to suggest that getting round the law, or using the law in ways it wasn't intended, is legal. We'd rather call it cheating, and we'd agree with George Osborne when he calls it morally repugnant.
We need to make it much clearer what is, and isn't, legal regarding taxes, if we're going to move the debate on.
We've got ten suggestions for Mr Osborne, which could help bring clarity to tax avoidance, and sort legitimate saving, such as pension schemes, from the dodges.
- Introduce a "General Anti-Avoidance Principle" that treats all avoidance as open to challenge.
- Stop the current round of HMRC staff cuts, to enable effective enforcement.
- Abolish the domicile rule.
- Put UK tax residence rules on a statutory basis, rather than HMRC guidelines.
- Abolish unnecessary reliefs enjoyed mainly by the wealthiest that encourage avoidance.
- Reform tax relief for charities to stop abuse and cut charities' admin burdens.
- Introduce an additional charge on investment income to discourage NI avoidance.
- Bring in a minimum tax rate over £150,000 income to cap use of reliefs.
- Work more actively with international partners to tackle tax haven abuses through information exchange.
- Redesign the way small limited companies work, to reduce the risk of abuse.
Help us call on the Chancellor to introduce these ten steps to tackle tax avoidance: