Banking: Offshore Accounts

Lord Barnett Excerpts

Tuesday 20th November 2012 Lords Chamber

[Lord Newby]

My Lords, I do not think that I will be able to help the noble Baroness in the case of Mr Maluf, who is a Brazilian citizen. We are not in a position to comment on his case. In respect of international corporations, the key thing is the extent to which we can extend international co-operation in that respect, which is why the recent announcement of the UK Chancellor and the German Finance Minister, following a G20 Finance Ministers’ meeting in Mexico, was very important. We are now looking at concerted international co-operation to strengthen international tax standards. However, at the moment, it may mean that international companies can pay less tax than they would otherwise owe. We are trying to catch up with new forms of commerce and to make sure that tax is paid in proportion to where people are undertaking their business.

[Lord Barnett]

My Lords, I declare a past interest as a senior partner in an accountancy practice. Does the Minister recall that the advice best given is the thickness of a prison wall between tax avoidance and tax evasion? We all welcome everything that the Government are doing to try to deal with the evasion side. However, does the Minister accept that there is a serious problem on the avoidance side in that there is a danger that an accountant could be held in abuse of his work and could be sued for negligence if he does not give advice on the best form of tax avoidance?

[Lord Newby]

My Lords, when it comes to tax avoidance, it is important that we begin to tilt the balance towards what is considered acceptable behaviour. That is one of the reasons why we will be introducing in next year’s Budget, or Finance Bill, a general anti-abuse rule. Those, including accountants, who undertake tax schemes, the principle purpose of which is to avoid tax, will find themselves subject to the rigour of that rule.