.png)
.png)
Tax avoidance by UK residents through tax havens costs at least £4 billion a year, the TUC has claimed.
The unions organisation has published its analysis of figures given in a recent parliamentary answes. The study, compiled by tax expert Richard Murphy, features the first estimates of how much is lost to the UK by the use of offshore accounts, claimed the TUC.
Over the past three years, the total tax lost through havens was £319 million, according to Government figures, with most money put through accounts in Jersey (£94 million), Switzerland (£72 million), the Isle of Man (£68 million) and Guernsey (£47 million).
These numbers, however, are a serious underestimate, insisted the TUC, which believes that over five times more money is held in offshore accounts by companies or trusts set up for the benefits of the super-rich.
The body added that ‘evidence suggests that only 18% of assets held offshore are held as cash in such accounts’.
TUC general secretary Brendan Barber remarked: 'The mechanisms of tax avoidance are always hard to understand, but this is a very simple story: if the super-rich held their money and assets in the UK they would contribute at least £4 billion extra.
'With the tax take falling because of the recession, there can be no better time to get tough with the super-rich’.
Mr Barber went on to welcome the prime minister's recent call for the G20 to clamp down on tax havens, but he also said that the Government ‘should back plans to reform the EU Savings Tax Directive to enhance information exchange between tax havens and the UK and other member states’.
He added: ‘[The UK] could also require that all the many tax havens it controls cancel the tax withholding option they now offer that provides this continuing opportunity for tax abuse – and we could require that they place the accounts, and even trusts, that are registered in their domains on public record, so everyone can see what is going on in each tax haven.'
John Whiting, the tax policy director of the Chartered Institute of Taxation (CIOT), suggested that the TUC may have confused tax avoidance with tax evasion.
‘One needs to be careful to differentiate between the two,’ said John, who is a tax partner with PricewaterhouseCoopers. ‘This report seems to, in fact, be considering the price of evasion, rather than avoidance.’
‘It’s hard to say how much money such illegal behaviour costs the Treasury. It could be £4 billion or £40 billion. I could neither prove nor disprove the TUC’s figure – and therein lies the problem with tax evasion and the black economy.’
