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Osborne launches fresh tax evasion crackdown

Targeting tax dodgers: UK Chancellor George Osborne

The UK Chancellor of the Exchequer has launched a fresh crackdown on tax avoidance and tax cheats.

George Osborne beefed up the UK tax authority, HM Revenue and Customs (HMRC), with an extra $1.29 billion million over five years to track down tax evaders.

And he promised to get tough on multinational companies that use complex multi-jurisdictional tax arrangements to cut their tax bills.

The new diverted profits tax (DPT) amounts will tackle big multinationals with aggressive corporate structures.

The DPT, announced in December, will levy a 25 per cent tax on profits that have been artificially moved outside the UK.

Mr Osborne said: “Our new diverted profits tax is aimed at large multinationals who artificially shift their profits offshore.

“I can confirm that we will legislate for it next week and bring it into effect at the start of next month.”

The chancellor added: “In 2010, City bankers boasted of paying lower tax rates than their cleaners; the rich routinely avoided stamp duty; and foreigners paid no capital gains tax.

“We’ve changed all that … Let the message go out: this country’s tolerance for those who will not pay their fair share of tax has come to an end.”

Mr Osborne also used the UK emergency budget statement to close a loophole that allowed UK residents who were officially non-domiciled to avoid paying tax on earnings overseas.

A total of around $92 million will be earmarked for serious and complex tax crime investigations, targeting the rich individuals and companies.

Mr Osborne said it was hoped to treble prosecutions in this area, raising more cash for the public purse.

Mr Osborne said, in addition to a prosecution push, HMRC’s “name and shame” lists would be widened to include serial users of failed tax avoidance schemes.

He added: “These people should have nowhere to hide.”

And he pledged to claw back more than $10.7 billion with a crackdown on tax avoidance and loopholes.

But Mr Osborne also promised to cut corporation tax to 19 per cent in 2017, and then 18 per cent from 2020 in a bid to attract more business to the UK.

The 18 per cent figure will be one of the lowest in Europe and down from 28 per cent when he took over as Chancellor in 2010.

Mr Osborne says the move was an advert to tell the world Britain is open for business.

Non-domicile tax status will be abolished for those who have been in the UK for more than 15 of the last 20 years.

Individuals who live in the UK and were born to UK-domiciled parents will also be ineligible for the status.