In seeking a fair contribution from the wealthy, the Government’s first priority is to tackle those who avoid or evade tax. The autumn statement contained a number of new measures to ensure that, including repatriating £5 billion in unpaid tax from Switzerland and new investment in Her Majesty’s Revenue and Customs to enable it to expand its anti-avoidance activity, in particular the specialist unit that supervises the compliance of affluent individuals.
People in Cornwall expect the wealthiest to pay their fair share of tax, so I welcome the Government’s planned offshore tax evasion strategy, which is much needed to track down funds that have been squirreled away and undertaxed. Will it cover British overseas territories as well as Crown dependencies, and what is the Minister’s assessment of the potential revenue?
Yes, it would. My hon. Friend gives me an opportunity to highlight the progress we have made in particular with the Isle of Man in ensuring there is much greater exchange of information. The net is closing in on those who wish to evade their taxes. Whether in Switzerland, Liechtenstein or the Isle of Man, it is becoming ever harder for them to evade paying taxes.
The Government’s shares for rights scheme is not only unpopular with the business community, but the head of the Institute for Fiscal Studies warned in the Financial Times today that it will
“foster a whole new avoidance industry”,
and the Office for Budget Responsibility believes the tax avoidance loophole it will create could cost up to £1 billion. Does the Minister agree with the OBR estimate? If so, why is he pressing ahead with a policy that is unpopular with business and could cost the taxpayer £1 billion?
First, it is not unpopular with business. Business groups have welcomed it, and the fact is that some aspects of our employment law can stand in the way of job creation. The OBR estimates that within the scorecard period this policy will cost £80 million in 2017-18. We believe it is the right move in order to ensure we have a more competitive environment.