Labour aims to shut down eurobonds loophole, which costs UK £500m per year
Labour is to launch an attempt to shut down a legal tax avoidance scheme that costs the country at least £500m a year.
The Independent last year revealed that more than 30 companies loaded up debt from their overseas owners to reduce their tax bills in Britain under the Quoted Eurobond Exemption.
Ed Balls, the shadow Chancellor, will table an amendment to the Finance Bill next week aimed at closing the “eurobonds loophole”.
He praised The Independent for exposing the scale of the tax dodge. He added: “High-profile cases of tax avoidance have undermined both public trust in company taxation and also hit businesses who play by the rules and pay their fair share.”
Mr Balls tonight committed Labour to greater transparency in the tax system by requiring all British overseas territories and crown dependencies to publish full details of the ownership of companies based in them.
The party will also bring in tougher controls on supposedly “dormant companies” which are not eligible for tax for five years, he said.
“The next Labour Government will act to tackle tax avoidance including by closing loopholes, increasing transparency and ensuring we have tougher independent scrutiny of the tax system.”
He said the latest figures showed that the amount of tax not collected by HM Revenue and Customs – the so-called “tax gap” – went up last year.
“This isn’t good enough, so Labour will make reversing this trend and narrowing the tax gap a priority for HMRC,” Mr Balls said.
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