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UK offshore tax crackdown failing

A crackdown on offshore tax cheats will net the UK Government just £349m a year, a third of the nearly £1bn ($1.4bn, €1.1bn) that had been forecast.

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The figures were released by HM Revenue & Customs following a freedom of information request by the Labour party, reports UK newspaper the Guardian.

Measures implemented by the government to close tax avoidance loopholes and recover unpaid tax included agreements with Switzerland, Liechtenstein and other low-tax regimes.

However, a revised forecast in September 2017, after most of the measures had closed, downgraded the expected additional revenue to £349m a year from the earlier estimate of £997m.

Shadow chancellor John McDonnell said the figures exposed “the utter failure” of the government to ensure the super-rich and big corporations were paying their fair share of tax, reports the paper.

Labour said a total of 28 anti-avoidance measures introduced under the coalition and Conservative government were bringing in less than expected, and that the gap between the tax take originally expected from them and the revised forecasts totalled £2.1bn.

McDonnell said the revision of other forecasts showed the Conservatives were dragging their feet on tax avoidance. “Their failed action on this issue discloses that, deep down, tax avoidance for them is an acceptable practice for the super-rich and big business whose interests they serve,” he said.

“We need an urgent change of direction from [chancellor] Philip Hammond. It’s not acceptable any longer for our public services like the NHS to go on being underfunded, while the Tories refuse to take serious action to properly clamp down on tax avoidance and evasion.”

Tax return disclosure

During a debate in January in Davos, Switzerland, McDonnell reiterated Labour’s plans to force people earning more than £1m a year to publish their tax returns, reports The Times newspaper.

He also said that accountancy firms should follow a type of Hippocratic oath, to stop them aiding tax avoidance.

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