Taxation: Avoidance

Lord Strasburger Excerpts

Wednesday 6th February 2013 Lords Chamber

[Lord Strasburger]

My Lords, can my noble friend tell the House whether alleged tax avoidance schemes, such as those operated by the Cup Trust, are likely to be caught by the general anti-avoidance rules when they are introduced? Can he also confirm that the general anti-avoidance rules are still scheduled to be introduced in this year’s Finance Bill?

[Lord Deighton]

I thank my noble friend for giving me the chance to shed further light on this issue. HMRC is extremely clear that circular schemes which are designed to exploit gift aid do not work in tax law. It will challenge and litigate enthusiastically against any scheme that it believes does not work in tax law. As the schemes do not work in tax law, the anti-avoidance provisions are not necessary and the schemes should fall at the first hurdle of not being legally acceptable. However, I can confirm that it is the Government’s intention to include the general anti-avoidance rules as part of the Finance Bill 2013.

Taxation: Avoidance

Lord Strasburger Excerpts

Wednesday 25th July 2012 Lords Chamber

[Lord Sassoon]

I can certainly confirm that tax avoidance is not illegal. I can also say, building on the figures that I gave before, that of the £35 billion tax gap, £30 billion is estimated to be evasion and a relatively small part, £5 billion, to be avoidance.

[Lord Strasburger]

My Lords—

[Lord Foster of Bishop Auckland]

My Lords—

--- Later in debate ---

[Lord Strasburger]

My Lords, could my noble friend tell the House what the annual cost is to the Exchequer of the tax breaks that this country gives to non-doms? Which other countries are so generous to their rich foreign residents?

[Lord Sassoon]

I suspect that it would be very difficult to estimate the benefits of the non-dom tax regime. The principal benefit is that we derive an enormous amount of business and employment from the fact that this country is relatively open to non-doms, and those benefits we must retain while at the same time making the non-doms pay their fair share. That is why the annual charge of £50,000 has been introduced by this Government and why we are clamping down on areas such as avoidance of stamp duty. We need to strike the right balance.