February 17, 2015

Bill Esterson and Ed Balls

Tax dodging is back in the headlines after news that HSBC has a bank in Switzerland that has been helping UK citizens avoid paying tax. 

The current government promised to take action against HSBC four years ago but failed to do so, even going as far as to give a top HSBC executive a peerage, make him a government minister and taking £5 million in donations from HSBC Swiss bank accounts.

Tax dodging accounts for at least £25 billion a year in lost revenue to the exchequer and some estimates put that figure much higher, so collecting tax from people who are trying to avoid paying would make all the difference to our NHS, to police, fire and council services and to the wider economy and living standards. It would also make a big difference in paying off our debts.

So news that the current government has failed on tax avoidance is a big concern and one that many of you share, judging by the number of letters and emails you have sent me.

Oxfam are one of a number of charities that is supporting a 'Tax Dodging Bill', something I completely support and I will be doing all I can to persuade Labour to tackle tax avoidance as one of its first acts not least so we can pay for improvements in our NHS and other services.

We need to close loopholes that cost the Exchequer billions of pounds a year, increase transparency and toughen up penalties. 
A ‘Tax Dodging Bill’ would close loopholes used by hedge funds to avoid stamp duty and stop some large companies which move profits out of the UK and avoid Corporation Tax. 
The bill would also stop umbrella companies exploiting tax reliefs, scrap the so-called “Shares for Rights” scheme, which could enable avoidance and cost £1bn and is administered by HMRC, and so ensure HMRC can better focus on tackling tax avoidance. 
We also need to stop disguised self-employment, which helps large firms avoid tax and exploits staff and tackle the use of dormant companies to avoid tax by requiring them to report more frequently.

Labour’s measures to tackle tax avoidance will also include ensuring stronger independent scrutiny of the tax system, 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 and ensuring developing countries are properly engaged in the drawing up
of global tax rules.

All parties say they want to tackle tax avoidance. The example of HSBC shows that the current government has completely failed and if anything has helped tax dodgers. 
The time has come to act and I will make sure that stopping the tax dodgers is a priority if I am an MP after May’s election.