Comment IsLinked@LDV: Vince Cable – This crisis must spur us to take on the tax avoiders

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.

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  • David Heigham 3rd Feb '09 - 7:11pm

    As so often, Vince put’s his finger on what needs to be done. “Simplicate, and add lightness” to business taxes is where the big benefit is. However, also strengthening HMRC’s arm in the year in, year out, steady effort to cut down on avoidance (and evasion) which the tax men would like to apply is common sense. It will benefit both public finances and standards in public life.

  • Andrew Duffield 3rd Feb '09 - 9:12pm

    If avoidable taxes on profits, transactional taxes on sales and deadweight taxes on jobs were replaced with simple, unavoidable taxes on economic rent (including the interest charged on debt-money created from nothing by the private banks) we might make some sustainable progress.
    But Vince knows that of course.

  • “Simplicate”? Ugh! One for the thread on horrible jargon …

  • Excellent to see Vince tackling this issue. Would be interesting to see if he could find out from the Liberal Democrat Party Treasurer, Lord Clement Jones what actions he took on behalf of the Cayman Islands when acting as their political lobbyist, in contravention of party rules?

    If a member of the Lords was paid by a foreign government to lobby in favour of protecting off shore tax-haven benefits, would not that be acting against the interests of the British people through lost UK tax revenues and shameful in the light of those impoverished African countries whose leaders use such tax havens to defraud the poorest in the world of literally billions of pounds by channeling it through them?

    Transparency in what members of our legislature are doing on behalf of foreign and British tax havens is crucial.

    So a list of the issues that Lord Clement Jones lobbied on behalf of the Cayman Islands, whilst breaking party rules banning such lobbying would be very useful to Vince Cables useful campaign.

    Keep it up Vince.

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