Britain's coalition government declared that this year's Budget would not contain "gimmicks or giveaways." But UK Chancellor George Osborne just unleashed a crowdpleasing pledge to clamp down on wealthy individuals or corporations that avoid or evade paying tax.
In his Budget 2015 speech, Osborne started off with applauding "the rich" for "making the biggest contribution to deficit reduction. I said we will be in this together and that is the proof."
"The share of income tax paid by top 1% of earners has increased from 25% in 2010 to 27% now. Conversely the lowest 25% of taxpayers are paying less than they were in 2010."
However, it was quickly followed by his Conservative party's promise to make multi-national corporations pay more as well as greater financial penalties and potential imprisonment for individuals that "routinely" avoid or evade tax.
"When we came to office, City bankers boasted that they pay a lower tax rate than their cleaners but we have changed all that," said Osborne. "It was this Prime Minister (David Cameron) that put tackling tax evasion and avoidance on the G20 agenda."
"I can confirm that we will legislate for it next week and bring it into effect at the start of next month. I am also today amending corporation tax rules to prevent contrived loss arrangements. And we’ll no longer allow businesses to take account of foreign branches when reclaiming VAT on overheads – making the system simpler and fairer. We will close loopholes to make sure Entrepreneurs Relief is only available to those selling genuine stakes in businesses.
"We will issue more accelerated payments notices to those who hold out from paying the tax that is owed. And we will stop employment intermediaries exploiting the tax system to reduce their own costs by clamping down on the agencies and umbrella companies who abuse tax reliefs on travel and subsistence – while we protect those genuinely self-employed.
The Chief Secretary will tomorrow publish further details of our comprehensive plans for new criminal offences for tax evasion and new penalties for those professionals who assist them. Let the message go out: this country’s tolerance for those who will not pay their fair share of taxes has come to an end."
Osborne estimated that the tax avoidance and evasion measures will raise £3.1 billion for the country. Tax evaders are usually fined. The HMRC and government can also ask companies or individuals to pay back tax it has deemed as missing from the group or individual's final tax bill. This can sometimes be paid in instalments.
However, the coalition government just pledged to come down harder on "persistent" tax avoiders and evaders by imposing stricter criminal offences on individuals or corporations to stop these practices.
The move may be part of the Conservatives plan to amend the public's perception that the Tories are too aligned with big business and rich individuals.
On March 17, Oxfam campaigners dressed up as Osborne and two of the other potential Chancellors, Labour's Ed Balls and Liberal Democrats' Danny Alexander, and protested outside Westminster.
The charity called for all political parties to dole out tougher punishments for huge corporations that make billions of pounds in revenue in the UK but pay perceptively low tax in comparison.
In February, HSBC's CEO Stuart Gulliver and Chairman Douglas Flint were called to parliament to answer questions over how the bank allegedly helped thousands of clients avoid taxes through its Swiss private banking arm.
Meanwhile, massive global companies such as Google, Amazon, and Starbucks have come under fire for generating billions of dollars in revenue in Britain but pay either no or very little corporation tax.
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