In his speech yesterday at the University of London Ed Miliband promised a further crack-down on tax avoidance. Overnight the detail emerged on Ed Balls’ blog:
We have supported the introduction of a General Anti-Abuse Rule (GAAR). Those who set up abusive schemes should run the risk of being caught by such a rule.
But it is currently a GAAR without teeth. Those who are caught have to repay the tax they tried to avoid, but they do not face a penalty. There is still no disincentive to try and game the system. That is why Labour will bring in a tough penalty regime for the GAAR, with fines of up to 100 per cent of the value of the tax which was avoided. For the first time this will provide a tough and genuine deterrent to those who try to abuse the system and avoid paying their fair share of tax.
Way back in the year 2000 Accountancy Age, perspicaciously described the Hardman Lecture as an “agenda setting” annual event in the tax calendar. In my speech on Tuesday night at the ICAEW I observed as follows:
I’ve been calling for many months in this blog for the Labour Party to raise its game on tax. This is a real sign that they’re starting to form into workable, concrete and effective policy what might otherwise be mere rhetoric.