Labour vows tax planning review
Labour will carry out a comprehensive review of tax planning schemes, including the use of deeds of variation on wills, should the party get to power following the general elections, shadow chancellor Ed Balls has said.
Balls (pictured) told the BBC’s Andrew Marr Show on 15 February he would review every area of tax law in a bit to crack down on “systemic practices” of tax avoidance, should he become chancellor.
This will include the way wills can be restructured following a person’s death in order to save costs such as tax or long term care fees.
Currently every adult is allowed to pass their share of an inheritance to somebody else in the same way as if the transfer had been made by the deceased.
Balls comments came in the wake of a large scale tax avoidance scandal involving HSBC’s Swiss branch, which helped rich clients “cheat the UK” out of millions in taxation.
The bank also faces investigations in various other countries for allegedly helping wealthy citizens evade hundreds of millions of pounds worth of tax.
Balls said: “We are the party who will crack down on tax planning, on systemic practices when people are trying to avoid paying the tax parliament intends in order to get round the law. That’s wrong and we’ll act.
“We will look at every area of tax law. The intention of parliament must be delivered.”
He added some tax planning was deemed acceptable, such as around individual savings accounts, the film tax relief or entrepreneur’s relief.
Balls also suggested HMRC had adopted a “blind eye approach” to cracking down on tax avoidance, and would be asked to act tougher under a Labour government.
Miliband had told the Welsh Labour conference on 14 February he planned to commission a review of HMRC’s approach to tax evasion and avoidance should he get elected.
He said the UK tax authority needed to “do a much better job”, while accusing the coalition of “shrugging its shoulders” on tax avoidance, the BBC reported.
Miliband claimed tax avoidance had left a £34bn hole in the UK’s finances.
