Tax Avoidance Raises UK Tax Rates

June 25, 2012 Taxation in UK

Tax Avoidance in the UKLONDON – The actions of rich taxpayers in the UK who actively try to avoid their tax obligations raise the country’s personal income tax rate by 2 percent.

In a television interview aired on June 24th the chief secretary of the UK Treasury Danny Alexander commented on tax avoidance schemes utilized by the country’s richest taxpayers, saying that the practices were “morally repugnant” and that UK taxpayers could see their tax rates slashed if everyone paid their “fair share” of tax.

Danny Alexander’s comments came in response to recent news that last week the HM Revenue and Customs has cracked down on a tax avoidance scheme, which is reported to have been utilized by over 1 000 wealthy UK taxpayers and had cost the country approximately GBP 168 million per year in lost revenues.

The chief secretary said that personal tax rates in the UK could be cut by more than 2 percent if the amount of taxes avoided by UK taxpayers could be reduced by at least one quarter. Elaborating further, he said, “… it’s the working people of this country who are paying the difference because so many of the wealthiest think they can get away without paying their fair share of tax.”

Danny Alexander emphasized that he was not only talking about tax evasion, but also “wholesale” tax avoidance. Explaining himself, he said that the UK was losing significant amounts of tax revenues to “…schemes that are set up, perhaps within the letter of the law as it stands at any particular moment, but which are set up purely with the purpose of reducing someone’s tax bill.”

Photo by WisconsinJobsNow