Many of you have been in touch with me about tax dodging following the recent revelations about HSBC.
On HSBC, what was reported was shocking and the Bank has now apologised. There are, however, a lot of questions about how this happened and who knew what in the UK about the Swiss Bank's activities.
We back multilateral approaches first and foremost, but we believe in the right to take unilateral action where international agreement cannot be achieved. We also agree with the Tax Dodging Bill campaign that there should be a rigorous and independent “spillover analysis” of UK corporate tax rules and an assessment of whether they have harmful knock-on effects on the ability of developing countries to collect their own taxes.
The reality is that the current Government has been ineffective in tackling tax avoidance in the last five years. They have failed to close loopholes that Labour has highlighted and the amount of uncollected tax has risen. Labour is therefore campaigning to close loopholes that cost the Exchequer billions of pounds a year, increase transparency and for increased penalties. We would:
• Introduce penalties for those who are caught by the General Anti-Abuse Rule
• Close loopholes used by hedge funds to avoid stamp duty
• Close loopholes like the Eurobonds loophole which allow some large companies to move profits out of the UK and avoid Corporation Tax
• Stop umbrella companies exploiting tax reliefs
• Scrap the “Shares for Rights” scheme, which the OBR has warned could enable avoidance and cost £1 billion and is administered by HMRC, and so ensure HMRC can better focus on tackling tax avoidance
• Tackle disguised self-employment by introducing strict deeming criteria
• Tackle the use of dormant companies to avoid tax by requiring them to report more frequently.
Other steps we are campaigning for include:
• Ensuring stronger independent scrutiny of the tax system, including reliefs, and the Government’s efforts to tackle tax avoidance
• Forcing the UK’s Overseas Territories and Crown Dependencies to produce publicly available registries of beneficial ownership
• Making country-by-country reporting information publicly available
• Ensuring developing countries are properly engaged in the drawing up of global tax rules
On Wednesday 11 February, we held an Opposition Day debate in Parliament calling on the Government to take action on tackling avoidance and back the measures we are committed to introducing in our first Finance Bill, but the Government voted down our motion. I have pasted below a link to the Hansard record of the debate.
Rt Hon Hilary Benn
MP for Leeds Central