UK Will Not Pursue Tax Avoidance
February 19, 2013 Taxation in UK
MUMBAI – The UK will not clamp down on businesses engaged in legitimate tax avoidance, and will lower the tax rates faced by companies in order to encourage them to pay their fair share instead trying to skip out on their obligations.
In a speech delivered on February 18th the Prime Minister of the UK David Cameron denounced the practice of tax evasion and overly aggressive tax avoidance, but clarified that the UK government will not make any moves to crack down on legitimate tax avoidance practices.
The Prime Minister explained that in the past it has been easy to distinguish between illegal tax evasion from legal tax avoidance, however, presently some forms of tax avoidance “… have become so aggressive that I think there are moral questions we have to answer about whether we want to encourage or allow that sort of behavior”.
David Cameron said that some commentators called for moves to be made to reclassify aggressive tax avoidance as illegal, but “…with respect to many friends in the accountancy profession it is difficult to do that”.
According to the Prime Minister, the UK is currently attempting to deal with aggressive tax avoidance by making efforts to reduce the tax rates faced by businesses in the country, and sending the message that “…if we are cutting this rate of tax down to a good low level, you should be paying that rate of tax, rather than seeking ever more aggressive ways to avoid it”.
Photo by The Prime Minister’s Office