Darling blitz on 'morally wrong' tax avoidance

CHANCELLOR Alistair Darling will use his Pre-Budget Report later this autumn to step up action on tax avoidance and tax havens, a Treasury minister said yesterday.

Financial Secretary Stephen Timms denounced tax avoidance as "morally wrong" and said the PBR would contain measures to "tilt the game back towards honest, hard-working taxpayers".

He was speaking ahead of the G20 summit of major economies in Pittsburgh, which is expected to agree the introduction of sanctions from March on tax havens which refuse to comply with international transparency requirements.

Mr Timms told a conference of international tax experts at the Treasury in London that the global economic downturn had created a "different world" in which tax cheats would be pursued more vigorously than ever before."

A minority of companies – including large and small businesses – behaved as if they were playing a "game" with the tax authorities, in which their role was to find ways round government efforts to improve the efficiency and equity of the tax system, said the minister.

But the impact of their efforts to get round measures like the new 50p income tax rate was to increase the complexity of the tax system and harm the wider interests of British business.

Mr Darling's PBR will set out a programme to strengthen the regime for disclosure of tax avoidance products, increasing penalties for non-compliance and giving HM Revenue and Customs more information on who is using the schemes, said Mr Timms.

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