Labour vows to raise £7.5bn in tax-dodging crackdown

Labour's Ed Balls has unveiled detailed plans for a crackdown on tax-dodging if the party win the election on May 7.

The Shadow Chancellor has set out a 10-point plan explaining how his party aims to close a number of legal loopholes that allow many of the UK's wealthiest individuals and companies to avoid paying their fair share of tax. He said the plans could make at least £7.5 billion a year by the middle of the next Parliament.

• Abolish the non-dom rules so that wealthy people are not able to use loopholes to avoid paying tax like the rest of us, while introducing a temporary residence rule for those genuinely in the UK for a short period of time, such as university students.

• Re-write the rules which allow private equity managers to get away with paying less tax than ordinary working people even when they have not been investing their own money.

• Close loopholes used by hedge funds to avoid stamp duty.

• Force the UK’s Overseas Territories and Crown Dependencies to produce publicly available registries of beneficial ownership.

• Increase penalties for tax avoidance including new penalties for those who are caught by the General Anti-Abuse Rule.

• Close loopholes like the Eurobonds loophole which allow some large companies to move profits out of the UK and avoid Corporation Tax.

• Scrap the “Shares for Rights” scheme, which the OBR has warned could enable avoidance and cost £1bn.

• Tackle disguised self-employment by introducing strict deeming criteria.

• Tackle the use of dormant companies to avoid tax by requiring them to report more frequently.

• Make country-by-country reporting information publicly available.

Mr Balls said a Labour government would expect the Treasury and HMRC to be ready from its first day in office with a draft finance Bill to put the changes into law. He told the Observer: