Chancellor announces £77million fighting fund to crack down on companies

Chancellor announces £77million fighting fund to crack down on companies

Chancellor announces £77million fighting fund to crack down on companies

The Chancellor pledged a crackdown on firms who get out of paying their fair share in corporation tax.

George Osborne acted following growing fury over multinational companies like Google, Amazon and Starbucks who paid nothing or very little despite huge sales.In his Autumn Statement, he said he would give HM Revenue and Customs a further £77million to fight tax avoidance by wealthy individuals and global firms.And he claimed the crackdown will raise another £2billion a year which can be used to cut the deficit.The Chancellor told MPs that he wanted a ‘tax system where the richest pay their fair share’.

‘The vast majority of people, rich or otherwise, pay their taxes and make their contribution,’ he said.’But there are still too many who illegally evade their taxes, or use aggressive tax avoidance in order not to pay their fair share.’Anger over tax avoidance reached a head last month when it emerged that coffee chain Starbucks had paid corporation tax in the UK over the past 15 years despite millions of pounds in sales.

Internet companies Google and Amazon have also been accused of ‘immoral’ tax regimes which means profits are diverted to other jurisdictions with lower tax rates.Mr Osborne said hundreds of millions of pounds of tax loopholes would be closed, and the HMRC would investigate the abusive use of partnerships.He reminded MPs that the government would introduce the first-ever ‘anti-abuse rule’, and pointed out that a new treaty with Switzerland means that from next year for the first time there will be money flowing from Swiss bank accounts to the UK than the other way round.

The Chancellor said he expects to receive £5billion over the next six years from the undisclosed Swiss bank accounts of UK residents.He added: ‘HMRC will not have its budget cut over the next two years, unlike other departments. Instead we will spend £77million more on fighting tax avoidance – and not just for wealthy individuals.’We want the most competitive corporate tax system of any major economy in the world, but we expect those corporate taxes to be paid.

‘So today we are confirming that we will put more resources into ensuring multinational companies pay their proper share of taxes. And we are leading the international effort to prevent artificial transfers of profits to tax havens.’He said he would be working with France and Germany to crack down on companies’ tax avoidance. It will be ‘an important priority’ of Britain’s G8 presidency next year.’We expect the action we announce today will increase the amount of money collected from tax evasion and avoidance by a further £2billion a year,’ he told the Commons.

Starbucks announced today that it will now hand over £10million to the Treasury after finally caving in to pressure.But its decision, after it admitted ‘it needed to do more’ on tax in the UK, may not placate boycotting consumers unhappy about its financial position.The company grips one third of the UK coffee market but recorded no taxable profits last year and so did not have to pay any corporation tax. Since 1998 the company has enjoyed £3billion in sales.

Although their new payment of up to £10million will be seen as a victory for the Government, it is only a tiny proportion of the amount of cash Starbucks generates in the UK.The Chancellor also announced that the main rate of corporation tax will be cut by a further 1 per cent to 21 per cent for April 2014.Labour Treasury spokeswoman Catherine McKinnell said: ‘This funding is welcome, but it’s a tiny proportion of the over £2billion of deep cuts to HMRC that George Osborne has pushed through.

‘If the Government was serious about tackling tax avoidance, they’d rethink their plan to cut a further 10,000 HMRC staff, which risks being a false economy.’Despite all the rhetoric about tackling tax avoidance, the progress made by this Government is limited at best. The deal struck with Switzerland is less transparent than a similar deal struck with Liechtenstein by the last government.’The latest National Audit Office report showed what can be achieved when a government is serious about tax avoidance and praises Labour’s disclosure laws for closing down avoidance opportunities and bringing in £12billion of extra tax since they were introduced.’ – Dailymail