Wednesday 2 December 2020 / 10:35 PM Economy

Labour accuses Government of ‘dragging its feet’ over efforts to tackle tax avoidance

Labour has today (Thursday) called on the Government to stop “dragging its feet” over promised measures to clamp down on tax avoidance.

In the March Budget, the Government promised to introduce new legislation to tackle the promoters of tax avoidance as part of the now delayed Finance Bill 2020-21. It also pledged to bring forward further measures in the Autumn Budget, which has since been scrapped.

Despite these pledges, Treasury minsters refused to commit to a timetable for reintroducing these key announcements and legislative measures earlier this week. Responding to questions from Labour in the House of Commons on Tuesday, ministers instead simply said they would be making further announcements ‘shortly’.

Following this exchange, Shadow Financial Secretary to the Treasury James Murray MP has today written to his opposite number, Jesse Norman MP, asking him again to set out clearly when the promised anti-avoidance legislation and additional measures would become law.

The letter asks Norman to confirm:

  • Whether draft anti-avoidance legislation published in July for this year’s Finance Bill will be included in next year’s instead.
  • When the further measures to tackle promoters of tax avoidance schemespromised this autumn will be published.
  • What draft legislation on these further measures will be published, and what Bill will turn them into law.

 

The delays in implementing this legislation echo previous delays in reforming the law over corporate liability for economic crime.

The Government first said it would look into the issue of corporate liability in 2014, but it took until 2017 to issue a call for evidence, and a further three years to respond. The Government then asked the Law Commission to produce an options report, which means there will be no law reform before 2023 at the earliest.

 

James Murray MP, Labour’s Shadow Financial Secretary to the Treasury, said:

“The Government promised to crack down on promoters of tax avoidance this year – but now all their pledges have been dropped from 2020, with no guarantee of when we’ll see them return.

“It’s irresponsible for the Government to keep dragging its feet on such a key issue. Everyone should play by the rules and pay their fair share of tax. The fact this Chancellor is pushing ahead with a key worker pay freeze while going soft on tax avoidance makes you wonder about his priorities.”