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Mayfair Tax Loophole

April 26, 2015 11:37 AM

Thank you for contacting me with respect to this important subject of tax avoidance and this loophole in particular

Liberal Democrats in Government have made huge progress in cracking down on tax avoidance and evasion to make the economy fairer for everyone. We have closed over 40 tax loopholes which previous Labour and Conservative Governments left wide open, allowing rich individuals and businesses to get away with paying small amounts of tax. We have also invested nearly £1 billion in HMRC so it could recruit specialist staff and expand its anti-tax dodging operations.

Thanks to the measures we've taken, HMRC will have secured £100 billion in additional tax revenue between 2010 and 2015. In the next Parliament, we want to raise a further £6 billion through our crackdown as we finish the task of balancing the country's books. Part of that will involve the creation of a new offence to punish firms that fail to act to prevent economic crime - a measure confirmed in the recent Budget. In last year's Autumn Statement, we stopped fund managers from avoiding income tax on their guaranteed management fees.

Liberal Democrats want to have a fundamental review of how tax is applied to the venture capital industry so we can root out bad practices while ensuring that we keep a successful private equity sector in the UK, which makes a large contribution to the economy.

It's worth remembering that under Labour, very wealthy hedge fund managers could get away with paying as little as 18% tax on their massive earnings while - at the same time - the people that cleaned their mansions and fast cars were taxed at 20%. We've put a stop to that by raising Capital Gains Tax by 10%. We have also - unlike previous Governments - made sure that rich people who buy private jets actually pay a fair share of tax on them.

Liberal Democrats have made cracking down on tax evasion a priority while in Government and we will not let up. This is why had I been an MP I would have voted for closing this Mayfair Tax Loophole, which was seconded by my Liberal Democrat colleague Andrew George who has been an MP for St Ives in Cornwall since 1997.

I hope this answers your question.