The TUC guide to tackling avoidance

Tackling tax avoidance has to be one of the government’s highest priorities. Here are ten simple steps it could take:

  1. Introduce a new law called a ‘general anti-avoidance principle’ that treats all tax avoidance as unacceptable and therefore open to challenge. This would be much stronger than the general anti-avoidance rule the government is currently proposing.
  2. Stop the current round of HM Revenue & Customs staff cuts so that adequate resources are available to tackle the issues this report raises.
  3. Abolish the domicile rule (which means, as our list shows, that people who live here but claim the UK is not their ‘natural home’ are only taxed on what they earn or bring to the UK as income – which for tax abusers is often nothing).
  4. Put the UK’s tax residence rules on a statutory basis (rather than relying on HMRC guidance) that stops game playing by tax exiles.
  5. Abolish unnecessary tax reliefs enjoyed primarily by the wealthiest individuals, many of which provide loopholes that encourage tax avoidance. The film financing rules are an obvious example.
  6. Reform tax relief for charities to stop abuse, increase the income of charities and cut their administrative burden.
  7. Introduce an additional tax charge on investment income above a set limit so that it is taxed at rates similar to those applied to earned income when National Insurance is taken into account. This would discourage the use of limited companies as national insurance avoidance schemes.
  8. Introduce a minimum rate of tax to be paid on the income of those earning more than £150,000 a year to ensure that they do not unduly benefit from tax reliefs and allowances that society cannot afford to provide to them.
  9. Engage more actively with international partners to tackle abuse through tax havens by demanding full and automatic information exchange on all UK resident people who maintain accounts of any sort in those places so that action can be taken against them as soon as possible.
  10. Redesign the way small limited companies work to reduce the risk of tax abuse.

If you agree with us, please help us call on Chancellor George Osborne to act on these ten points and really tackle tax avoidance.

NEXT: Sign the petition now!