Britain’s coalition government declared that this year’s Budget would not contain “gimmicks or giveaways.” But UK Chancellor George Osborne just unleashed a crowdpleasing pledge to clamp down on wealthy individuals or corporations that avoid or evade paying tax.
In his Budget 2015 speech, Osborne started off with applauding “the rich” for “making the biggest contribution to deficit reduction. I said we will be in this together and that is the proof.”
“The share of income tax paid by top 1% of earners has increased from 25% in 2010 to 27% now. Conversely the lowest 25% of taxpayers are paying less than they were in 2010.”
However, it was quickly followed by his Conservative party’s promise to make multi-national corporations pay more as well as greater financial penalties and potential imprisonment for individuals that “routinely” avoid or evade tax.
“When we came to office, City bankers boasted that they pay a lower tax rate than their cleaners but we have changed all that,” said Osborne. “It was this Prime Minister (David Cameron) that put tackling tax evasion and avoidance on the G20 agenda.”
“We’re looking to legislate and amend corporation tax rules and make sure that businesses, no longer, take advantage of using foreign branches to avoid tax. We will also step up more accelerated payment notices to those who routinely avoid paying tax. We are also looking at stronger criminal offences for tax evasion. [Companies and individuals] who don’t pay their fair share of tax will come to an end.”
Osborne estimated that the tax avoidance and evasion measures will raise £3.1 billion for the country
The move may be part of the Conservatives plan to amend the public’s perception that the Tories are too aligned with big business and rich individuals.
On March 17, Oxfam campaigners dressed up as Osborne and two of the other potential Chancellors, Labour’s Ed Balls and Liberal Democrats’ Danny Alexander, and protested outside Westminster.
The charity called for all political parties to dole out tougher punishments for huge corporations that make billions of pounds in revenue in the UK but pay perceptively low tax in comparison.
In February, HSBC’s CEO Stuart Gulliver and Chairman Douglas Flint were called to parliament to answer questions over how the bank allegedly helped thousands of clients avoid taxes through its Swiss private banking arm.
Meanwhile, massive global companies such as Google, Amazon, and Starbucks have come under fire for generating billions of dollars in revenue in Britain but pay either no or very little corporation tax.