Anti-avoidance: New tax crackdown to raise more than £1.6bn
Thursday 25 March 2010
The latest raft of anti tax avoidance measures are set to raise £1.6bn towards plugging the hole in Britain's public finances, the Government said yesterday.
Chief among them is an agreement with the government of Liechtenstein to share information on tax. Allowing HM Revenue & Customs access to details of money that British citizens have held in the principality without declaring it is predicted to raise as much as £500m.
The Chancellor is also introducing rules to crack down on people declaring what the Revenue believes should be income as a capital gain for tax purposes. This has often been used by business owners and executives in an attempt to reduce their tax liabilities. It is expected to raise £340m.
The two measures alone will therefore account for more than half of the savings that the Government expects to reap from the plans.
Other measures announced in the small print of the Budget include a clampdown on certain executive share schemes and rules to block tax avoidance schemes that exploit the rules for tax relief on gifts of qualifying investments to charities.
Simon DeYoung, tax director at PricewaterhouseCoopers, said of the plans: "This is a general direction of travel that the Government has been taking for some years now and the consequence of its disclosure regime which allows the Revenue to close tax loopholes."
He added: "The overall policy has proved to be reasonably successful in protecting revenue for the Exchequer. But people can be reassured that they can still benefit by managing their tax affairs efficiently."
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