Tax: Aggressive Tax Avoidance

Lord Peston Excerpts

Wednesday 9th July 2014 Lords Chamber

[Lord Barnett]

To ask Her Majesty’s Government what is their definition of aggressive tax avoidance; and what specific examples they can instance.

[Lord Peston (Lab)]

My Lords, on behalf of my noble friend Lord Barnett, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.

[Lord Newby (LD)]

My Lords, the Government have taken a wide range of actions to tackle all forms of tax avoidance. The general anti-abuse rule, which this Government introduced, specifically seeks to tackle abusive tax-avoidance schemes. HMRC has provided examples of the arrangements that will be captured under this rule in its very detailed published guidance. A further example of aggressive tax avoidance is detailed on the front page of today’s Times.

[Lord Peston]

My Lords, the reason that your Lordships are stuck with me and not my noble friend is that he is very ill indeed, and I know that all noble Lords will wish to send wishes that he recovers quickly.

[Noble Lords]

Hear, hear.

[Lord Peston]

In particular so that he can occupy his usual place and ask some really difficult questions.

In so far as I understand this subject at all, is it not the case that aggressive tax avoidance leaves companies making enormous sums of money and millionaires paying lower rates of tax than those with average or around average incomes? Does this not bring the whole tax system in our country into disrepute? How urgently are the Government trying to deal with aggressive tax avoidance, with a view to punishing those who do it?

[Lord Newby]

My Lords, first of all I ask the noble Lord to pass on my good wishes and, I am sure, those of the whole House to his noble friend.

The Government take this issue extremely seriously. We have invested additionally in this area more than £1 billion over the spending review period, and taken on another 2,500 staff to work on it. The compliance yield that flowed from this work in the past year was £23.9 billion—the highest ever—and we have increased the number of people being prosecuted for tax crime to 2,600 in this Parliament, which has resulted in 2,700 years of jail sentences.