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Government to 'name and shame' wealthy tax avoiders | |
(about 7 hours later) | |
The government is promising to "name and shame" wealthy people who use aggressive tax avoidance schemes. | |
Treasury minister David Gauke will announce that finance firms will be forced to hand over details of the clients on their books. | |
The proposal is part of a government consultation on curbing tax avoidance. | |
Last month Prime Minister David Cameron condemned the use by comedian Jimmy Carr of a Jersey-based scheme as "morally wrong". | |
That was one of a number of high-profile cases of people using financial loopholes to legally avoid large tax bills. | That was one of a number of high-profile cases of people using financial loopholes to legally avoid large tax bills. |
'Free ride' | 'Free ride' |
The Treasury estimates that 14% of all unpaid tax income is due to aggressive avoidance schemes. Although they are not illegal, ministers are promising to clamp down on them. | |
They are considering measures to make finance companies disclose details of wealthy clients who take advantage of such schemes. | |
These firms will also have to say how all their tax avoidance schemes work, not just the ones for which they are being criticised. | |
This comes alongside plans to legislate to curb tax avoidance through a general anti-avoidance rule. | |
Companies could face fines of more than £1m if they flout the new rules. | |
'Cowboys' | |
In a speech to the Policy Exchange think tank, Mr Gauke will say: "We are building on the work we have already done to make life difficult for those who artificially and aggressively reduce their tax bill. | |
"These schemes damage our ability to fund public services and provide support to those who need it. They harm businesses by distorting competition. They damage public confidence. | |
"And they undermine the actions of the vast majority of taxpayers, who pay more in tax as a consequence of others enjoying a free ride." | "And they undermine the actions of the vast majority of taxpayers, who pay more in tax as a consequence of others enjoying a free ride." |
In a column for the Times newspaper, Mr Gauke wrote: "Legitimate use of reliefs, for example taking out a tax-free ISA, is not avoidance. Buying a house for personal use through a company to avoid stamp duty, on the other hand, clearly is. | |
"Morally repugnant practices such as this are where the government is cracking down." | |
He promised to deal with "cowboy advisers", who devise and sell schemes to divert money away from the Exchequer. | |
Mr Carr last month confirmed making a "terrible error of judgement" after it emerged he used a complex scheme to reduce his tax bill. |