TUC Calls For Anti-Avoidance Tax Provision

Trade union the TUC has today suggested that the UK treasury could be losing out on some £25 billion every year as a result of tax avoidance, and has called for a general anti-avoidance principle to be introduced into domestic tax law.

The trade union published the findings of its research, which investigated taxation and avoidance amongst the wealthiest individuals and corporations, finding that some £25 billion had been avoided through artificial transactions and tax planning, all of which is permitted by the tax legislation.

Given the complexities of the tax system, which is considerably layered and deals with volumous scenarios and circumstances, avoidance is a major part of the complimentary services industry, with law firms and accountants nationwide offering tailored solutions to minimise tax liability.

However, other jurisdictions approach tax avoidance with a general starting point that outlaws any practice of minimising tax liability, which the TUC has suggested would be the best solution for the UK economy and for the Treasury, in a bid to clampdown on the loopholes exploited by the wealthiest individuals and corporations.

One of major arguments proposed against general anti-avoidance provisions is that they ultimately cost more lost revenue in terms of companies and individuals moving to less tax-heavy jurisdictions.

However the author of the TUC report, Richard Murphy, has suggested that that will not be a factor in the UK and that no signficant loss of total tax income will be felt.

Whilst the TUC proposals will no doubt be considered by the Treasury, it remains to be seen whether such a sweeping change to tax legislation will be favoured given the current economic climate.

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