Mon, Aug 29, 2011 - Page 7 News List

Britain makes plan to tax accounts of ‘leeches on society’

Reuters, LONDON

Britain will step up international pressure on British tax evaders after reaching an agreement with Switzerland, Chancellor of the Exchequer George Osborne said on Saturday.

Osborne said last week’s deal with Switzerland to tax money kept by British residents in secret Swiss bank accounts was “just the start.”

“We’re looking to do more and increase international pressure on those that refuse to cooperate. The number of places to hide money away from the taxman will get smaller and smaller,” he wrote in an article for The Observer newspaper.

NEW DEAL

Under the deal, Swiss banks will have to pay 500 million Swiss francs (US$630 million) upfront and a retro-active levy could net about £5 billion (US$8.2 billion) for the British government, keen to boost revenue as it struggles with one of the largest budget deficits among industrialized countries.

Calling tax evaders “leeches on society,” Osborne said: “My message to those who try to hide their incomes from the Revenue [British tax authority] in offshore bank accounts and false declarations is simple: We will find you and your money.”

LOOPHOLES

Tax evaders also made use of tax loopholes, which had multiplied over the last decade, Osborne said.

“It’s up to me ... to close the loopholes down, and the best way is to make the tax code simpler. In the last two budgets we’ve done that,” Osborne said.

Steps to counter tax avoidance in this year’s budget would raise £1 billion a year, he said.

Osborne, part of a coalition government which took office after an election last year, accused the previous Labour government of presiding over “a bonanza of tax evasion and avoidance.”

“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,” he wrote.

Osborne’s talk follows reports of discussions within the coalition on cutting the 50 percent top rate of income tax for high earners.

That could open the government to charges that the rich are not doing their bit to cut the budget deficit.

The Observer said Osborne’s tax evasion drive could be part of a campaign to counteract any damage to the government’s image from a tax cut for high earners.

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