David Cameron warns large companies over tax

 

Prime Minister David Cameron called today for a tougher approach to large companies who use "fancy corporate lawyers" to "endlessly reduce" their tax bills.

The Prime Minister said the Government was considering introducing new powers to prevent tax avoidance by big firms and the wealthiest individuals.

His comments came as Deputy Prime Minister Nick Clegg said he was urging Chancellor George Osborne to include anti-avoidance measures in this year's Budget.

Mr Clegg said that millions of voters were "quite rightly angered" by the fact that a "wealthy elite of large businesses" was using an army of accountants to get out of paying their fair share of tax.

"They basically see paying tax as an optional extra, they pick and choose the taxes you pay," Mr Clegg told BBC Radio 4's Today programme.

"There should be a general rule that you can't play the system, you can't abuse the system.

"We have received a report from an expert, Graham Aaronson, who has provided a report to the Treasury, that says what he calls an anti-abuse rule is feasible.

"I very much hope - and I'm not going to write George Osborne's budget - we can make progress on that in the Budget. We have got to make sure the tax system is fair."

Speaking in Maidenhead to an audience of small and medium-sized business leaders - many of whom are angry about forthcoming spot checks on their paperwork by HM Revenue and Customs (HMRC) - Mr Cameron agreed that bigger companies had to pay their "fair share".

HMRC had to collect in "a fair and business-friendly way", said the PM.

"They have got to be thinking about being business-friendly to small businesses," he said.

"With the large companies, that have the fancy corporate lawyers and the rest of it, I think we need a tougher approach.

"One of the things that we are going to be looking at this year is whether there should be a general anti-avoidance power that HMRC can use, particularly with very wealthy individuals and with the bigger companies, to make sure they pay their fair share."

Mr Cameron said he had worked in "corporate Britain" and knew how companies "use the complexity of the tax and legal system to try and endlessly reduce their tax payments".

"Of course it's right for companies to be able to plan and have predictability and the rest of it, but they should be paying a fair tax rate," he added.

PA

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