UK Launching Ambitious New Crackdown on Evasion
December 6, 2013 Uncategorized
LONDON – The government of the UK wants to reduce the tax obligations faced by low and medium income families, and is looking to fund the cuts by making sure that the country’s highest paid people are meeting their tax obligations.
On December 5th the Chancellor of the Exchequer George Osborne presented the Autumn Statement 2013, detailing the government’s economic forecasts for the national economy, and presenting several tax changes to be implemented in the near future, with a particular emphasis on what measures will be taken to prevent tax abuse.
George Osborne announced that the government is set to launch one of its biggest ever crackdowns on tax evasion, tax fraud, and the occurrence of administrative errors, ultimately aiming to increase tax collections by an estimated GBP 9 billion over the course of the next five years.
According to the Chancellor, the anti-evasion measures will include preventing “…abuse of dual contracts, offshore oil and gas contracting, derivatives linked to profits and share buybacks,” …while ensuring that “…the tax advantages of partnerships aren’t abused,” and addressing “…the growth of intermediaries disguising employment as false self-employment, depriving workforces of basic employment rights like the minimum wage in a bid to avoid employer National Insurance.”
In addition to the efforts to fight tax evasion, extra tax revenues are planned to be collected from capital gains tax, as from April 2015 any non-resident selling their UK residential property will be liable to pay capital gains tax on the profits realized.
The combined efforts to raise revenues and eliminate tax evasion are intended to fund tax relief ordinary taxpayers, with the government introducing a GBP 1000 transferable tax allowance for married couples, rolling back some environmental taxes in order to reduce the average residential power bill by GBP 50 per year, and cancelling the 2 percent hike to petrol taxes planned for next year.
Unemployed citizens are also likely to be better off, with more funding being directed to training, apprenticeship and employment programs for job-less youths and beneficiaries.