Insights

Election 2017 - other manifesto tax proposals

  • Written By: Cherry Reynard
  • Published: Tue, 30 May 2017 08:33 GMT

Beyond business and personal taxation proposals, the majority of key parties outlined intentions to further tackle tax evasion and tax avoidance, fund HMRC, tax transparency and review regional powers.

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Our summary is based on information available and analysed up to 30 May 2017. Please note we have imported terms and words from the manifestos and the economics of the proposals have not been assessed.

DISCLAIMER
By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of publication.

Labour

General avoidance and evasion measures
  • Give HMRC the resources and skills necessary to clamp down on tax avoidance, including reversing cuts at HMRC
  • Act decisively on tax havens
  • Take on the social scourge of tax avoidance through the ‘tax transparency and enforcement’ programme and close down tax loopholes as follows:
    – Launch an immediate public inquiry into tax avoidance
    – Scrutinize further MPs interests to include mandatory publication of all offshore holdings
    – Create a specialised tax enforcement unit
    – Introduce a withholding tax for ‘abusive’ tax havens, based on a list that will be drawn up
    – Require all large companies to publicly file tax returns with Companies House
    – Require all individuals earning more than £1 million per year to publicly file their tax returns
    – Prevent tax avoiders from being able to access public sector contracts
    – Repatriate contracts awarded to contractors under the Private Finance Initiative from offshore tax havens to the UK
    – Introduce a public register of companies bidding for public sector contracts and procurements which will show their shareholders, directors, control and full disclosure of beneficial ownership. The companies must have a permanent establishment in the UK and pay taxes on profits made in the UK
    – Require disclosure of all company shareholders above a minimal value, instead of only those holding more than 25%
    – Create a public register of all trusts showing their assets and beneficiaries, particularly trusts transferring the residence of their trustees offshore and those tax avoidance schemes involving trusts disclosed to HMRC under current laws
    – Work with the banking sector to promote good corporate governance and provide further information over beneficial ownership of all companies and trusts that they work for
    – Introduce a General Anti-Avoidance Rule to end sham transactions (any transaction lacking economic substance), including existing arrangements
    – Introduce strict minimum standards for Crown Dependencies and Overseas Territories, including a public register of owners, directors, major shareholders and beneficial owners, in addition to a requirement for companies and limited liability partnerships to publish accounts
  • Restore preferred creditor status for HMRC to allow less tax to be written off and remove the scope for tax avoidance
Other measures
  • Introduce an Offshore Company Property Levy of 15% to apply to purchases of residential property by offshore trusts located in known tax havens
  • Initiate an immediate independent review of the efficiency, range, and scope of tax-planning structures like trusts
  • Seek consensus on a cross party basis about how to fund social care, including:
     Wealth taxes
     An employer care contribution
     A new social care levy
  • Introduce a ‘presumption of devolution’ where devolved powers transferred from the EU will go straight to the relevant region or nation

Liberal Democrats

General avoidance and evasion measures
  • Take tough action against corporate tax evasion and avoidance:
    – Introduce a General Anti-Avoidance Rule
    – Set a target for HMRC to reduce the tax gap
  • Continue to invest in HMRC staff
Other measures

 

  • Make taxes fairer and simpler, help those on low and middle incomes and ensure large international companies and those on the highest incomes make a fair contribution
  • Conduct a full-scale review into the burden of taxation and spending between generations to ensure that government policy promotes fairness between generations
  • Reduce the reporting requirement for disclosure of shareholdings to 1% to increase transparency
  • Introduce a 5p charge on disposable coffee cups
  • Deliver home rule to each of the nations of a strong, federal and United Kingdom
  • Support devolution of power to Scotland, Wales and Northern Ireland
  • Support an English-only stage in legislation affecting England, so English MPs can have a separate say, on a proportional basis, on laws that only affect England
  • Include a permanent Scottish Parliament that could only be abolished by the sovereign will of the Scottish people

SNP

General avoidance and evasion measures
  • Back measures to improve tax collection and tougher action to tackle tax avoidance, including:
    – a moratorium and review of the closure of HMRC offices in Scotland and across the UK
    – beneficial ownership of companies and trusts to be made public
    – measures to improve the transparency of tax paid by major international companies
    – further action by the UK government to tackle international tax avoidance.
  • Recognise that until more anti-avoidance powers are devolved, an increase in the additional tax rate increases in Scotland alone could encourage tax avoidance
Other measures
  • Back tax proposals that promote fairness
  • Oppose scrapping the Human Rights Act
  • Push for a formal independently chaired review of the recommendations of the Office of Tax Simplification’s recommendations to assess which should now be taken forward
  • Continue to call for the UK government to renegotiate a new, fair tax treaty with Malawi

UKIP

General avoidance and evasion measures
  • Close the loophole allowing businesses to pay tax in whichever EU or associated country they choose, and bring in any further measure necessary to prevent large multi-international corporations from using aggressive tax avoidance schemes
Other measures
  • Leaving the EU, leading to greater control over tax policy
  • Abolish green taxes and levies and withdraw from the EU’s Emissions Trading Scheme, reducing fuel bill and enhancing industrial competitiveness

Green

General avoidance and evasion measures
  • Ensure that everyone pays their fair share of tax and crackdown on tax dodging
  • Support the closing of tax evasion loopholes
Other measures
  • Invest in more staff at HMRC
  • End the sale of tax records, for commercial or other ends
  • Achieve a taxation system that promotes fairness and rewards behaviour that is good for both society and the environment
  • Revive local government through the use of smaller community and district councils with enhanced powers including new tax-raising powers

Plaid Cymru

General avoidance and evasion measures
  • Strengthen tax anti-avoidance legislation to make it harder for companies, individuals and other organisations to avoid paying their rightful amount
Other measures
  • Oppose the centralisation of tax offices in Wales and fight to keep centres open

Conservatives

General avoidance and evasion measures
  • Vigorous action against tax avoidance and tax evasion has already been taken closing the tax gap to one of the lowest in the world. Go further now to:
    – Legislate for tougher regulation of tax advisory firms. [This may refer to the provisions deferred from Finance Act 2017 (penalties for enablers of defeated tax avoidance) and the provisions introduced in the Criminal Finances Act 2017]
    – Improve HMRC’s capabilities to stamp down on smuggling
    – Take further measures to reduce online fraud in VAT
    – Ensure overseas investment into the UK is not driven by tax avoidance
Other measures
  • Found plans on the principles of low taxes
  • Continue with the fiscal rules announced by the chancellor in the 2016 autumn statement
  • Take a more proactive approach to transparency and misuse of trusts
  • Simplify the tax system, which remains too complicated, making it too hard for people, especially self-employed people and small businesses, to assess their taxes
  • Ensure that those who can should rightly contribute to their elderly care from savings and accumulated wealth, rather than expecting current and future taxpayers to carry the cost
  • Respect the devolution settlements and envisage that the powers of the devolved administrations will increase as we leave the EU
  • Remain committed to the devolution of corporation tax powers to the Norther Ireland Executive, subject to a demonstration of fiscal stability
  • Enact the Great Repeal Bill to convert EU law into UK law, correcting the laws that do not operate appropriately once we have left the EU
  • Parliament to pass legislation to amend, repeal or improve any piece of EU law, as will the devolved legislatures where they have power to do so
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