Over at The Guardian’s Comment Is Free blog, Lib Dem deputy leader Vince Cable argues that the shocking scale of systematic corporate tax avoidance strikes a particularly ugly note in these straitened times. You can read it in full here, but here’s an excerpt:
How should the government tackle corporate tax-dodging? Tax simplification would help. There could be lower headline rates of corporation tax in return for eliminating the complex network of tax allowances which companies currently enjoy. It has been estimated that simplification alone could cut the headline rate by 5%. There is then less incentive for tax avoidance.
Beyond that, there is a strong case for a more aggressive approach to tax avoidance. The systematic and widespread avoidance of stamp duty land tax by corporate vehicles can be stopped quickly. More broadly the idea of a General Anti-Avoidance Rule is that tax is applied wherever there is an intention to avoid it, even if the loophole hasn’t specifically been identified in advance by the Inland Revenue. …
The UK has traditionally dragged its feet on measures to curb tax havens, on the basis that these helped the City of London to attract business. It is to be hoped that straitened fiscal circumstances and a less credulous approach to the City will now persuade the government to turn its guns on the tax havens and tax-avoidance industry.