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Tax Avoiders Will Be 'Named And Shamed'

(c) Sky News 2012

The rich and famous who use tax avoidance schemes to protect their earnings will be named and shamed under new Government plans.

Cowbow tax advisers will be forced to disclose their client lists and will also be named themselves, under the latest crackdown.

Treasury Minister David Gauke claimed the moves could help recoup £5bn for the public purse, which accounts for 14% of uncollected revenue.

He told the Policy Exchange think tank in a speech that it was "galling" for the hard-working majority to see others shirk their civic duty by exploiting loopholes in the tax system.

Mr Gauke said: "We are building on the work we have already done to make life difficult for those who artificially and aggressively reduce their tax bill.

"These schemes damage our ability to fund public services and provide support to those who need it. They harm businesses by distorting competition. They damage public confidence.

"And they undermine the actions of the vast majority of taxpayers, who pay more in tax as a consequence of others enjoying a free ride."

The address came as the Government launched a consultation paper on the planned reforms, which follow a wave of disclosures about practices used by the wealthy to side-step large tax bills.

Officials often hit a dead end when investigating schemes that are based offshore but under the proposals UK promoters will be made to hand over customer databases to inspectors.

That information will be used to formally warn clients directly about the deals they have signed up to and to work out how much tax they owe if the scheme fails.

Under the reforms, which will go out to consultation, a promoter who has been penalised for not complying with the rules will also have to provide extra information to HMRC on all of their schemes, not just the one they were reprimanded for.

Last month comedian Jimmy Carr admitted to making a "terrible error of judgement" after it emerged he used a complex scheme to reduce his tax bill.

The K2 tax-avoidance scheme Carr is said to have used enables members to pay income tax rates as low as 1%.

Tax avoidance represents nearly 14% of the UK tax gap, according to the Treasury.

TUC general secretary Brendan Barber and campaigners said the Government would be better off closing the loopholes in current laws.

"Ministers must cut this multi-billion pound problem off at source by closing the many loopholes that the super-rich exploit," Mr Barber said.

Matthew Sinclair, director of the TaxPayers' Alliance pressure group, added: "New powers to uncover specific abuses are a poor substitute for serious reform of the tax system so that there are fewer loopholes.

"Ministers need to be more realistic about HMRC's ability to clamp down when its resources are so stretched simply administering our hideously complicated taxes, let alone chasing those finding creative and legally dubious ways around them."

The latest Government move comes as the BBC denied allegations it is asking staff to "go off the books" to slash its tax bill.

Whistleblowers claim stars are regularly ordered to set up personal service companies, which reduce the corporation's spend on tax and national insurance, according to the Daily Mail (LSE: DMGT.L - news) .

But the BBC said in a statement: "The BBC is not asking any of its staff to 'go off the books'. Moreover the BBC fulfils all its tax obligations to HMRC and expects all its contributors to do likewise, as is made clear in their contracts. 

"HMRC is sent a full breakdown of all payments made to presenters annually. It would be offensive to suggest that talent are not paying the appropriate amount of tax when there is no evidence to back up such a claim."

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