The UK's government is taking "radical steps" to crack down on unfairness in the tax system, the Chancellor has said, pledging to 'find' tax evaders and their money.
Writing in the Guardian George Osborne made it clear that the government is systematically shutting down "the hiding places for tax cheats".
Osborne then turned to the landmark agreement struck with Switzerland last week, which provides for the retrospective and future taxation of funds held in Swiss bank accounts by UK residents. Taxpayers will be able to elect to either disclose the nature of their Swiss banking relationships to UK authorities, or pay a tax of between 19% and 34% for periods prior to January 1, 2013, when the agreement is expected to enter into force. After this date, a final withholding tax will charged at 48% on investment income and at 27% on capital gains.
Osborne believes the deal has the potential to generate billions of pounds in revenue, but is adamant that it is "just the start". He said, "we're looking to do more and increase international pressure on those that refuse to co-operate. The number of places to hide money away from the taxman will get smaller and smaller".
On the domestic front, Osborne argues that the best means of eradicating the use of tax loopholes is to simplify the tax system. He referenced the GBP900m set aside to enable HM Revenue and Customs (HMRC) to fight avoidance and evasion, and the government's targeted action against specific avoidance schemes, including stamp duty and disguised remuneration. He added that: "In total, the tax avoidance measures in this year's budget will raise GBP1bn a year – more than in any single budget of recent years."
The capital gains system has also come under fire for its use by those "shifting their income into capital gains", costing over GBP1bn a year. This, Osborne said, was "clearly unfair", and has thus been stopped. Lastly, Osborne wrote of the government's work on the 'non-dom' system. He said that while he wishes to see the UK "attract talented people from around the world", he believes they must make a contribution and that a growing number of abuses must be ended. Under previous rules, those non-doms resident in the UK for more than seven years had to pay a contribution of GBP30,000 - Osborne increased this in April to a levy of GBP50,000 on those having lived in the UK for more than 12 years.
Osborne concluded with a clear statement of intention: "with this coalition government the hiding places for tax cheats are systematically being shut down. We will make sure that everyone pays their fair share."
Writing in the Guardian George Osborne made it clear that the government is systematically shutting down "the hiding places for tax cheats".
Osborne then turned to the landmark agreement struck with Switzerland last week, which provides for the retrospective and future taxation of funds held in Swiss bank accounts by UK residents. Taxpayers will be able to elect to either disclose the nature of their Swiss banking relationships to UK authorities, or pay a tax of between 19% and 34% for periods prior to January 1, 2013, when the agreement is expected to enter into force. After this date, a final withholding tax will charged at 48% on investment income and at 27% on capital gains.
Osborne believes the deal has the potential to generate billions of pounds in revenue, but is adamant that it is "just the start". He said, "we're looking to do more and increase international pressure on those that refuse to co-operate. The number of places to hide money away from the taxman will get smaller and smaller".
On the domestic front, Osborne argues that the best means of eradicating the use of tax loopholes is to simplify the tax system. He referenced the GBP900m set aside to enable HM Revenue and Customs (HMRC) to fight avoidance and evasion, and the government's targeted action against specific avoidance schemes, including stamp duty and disguised remuneration. He added that: "In total, the tax avoidance measures in this year's budget will raise GBP1bn a year – more than in any single budget of recent years."
The capital gains system has also come under fire for its use by those "shifting their income into capital gains", costing over GBP1bn a year. This, Osborne said, was "clearly unfair", and has thus been stopped. Lastly, Osborne wrote of the government's work on the 'non-dom' system. He said that while he wishes to see the UK "attract talented people from around the world", he believes they must make a contribution and that a growing number of abuses must be ended. Under previous rules, those non-doms resident in the UK for more than seven years had to pay a contribution of GBP30,000 - Osborne increased this in April to a levy of GBP50,000 on those having lived in the UK for more than 12 years.
Osborne concluded with a clear statement of intention: "with this coalition government the hiding places for tax cheats are systematically being shut down. We will make sure that everyone pays their fair share."
