Lib Dems pledge tax avoidance crackdown

The Lib Dem leader and deputy prime minister said today the coalition would come down “as hard on tax cheats as on benefits cheats” as it seeks to recoup £7bn a year currently being dodged.

Funding will be made available for HM Revenue & Customs to increase criminal prosecutions for tax evasion five-fold, with a dedicated team of investigators created to catch those hiding money offshore.

Private debt collection agencies will be tasked with recouping up to a billion pounds of tax debt, while smugglers and organised crime will also be targeted.

HMRC estimates that the £900m package will boost revenues by £7bn annually by 2014-15.

Interviewed on the BBC’s Andrew Marr show as the Liberal Democrat conference got under way in Liverpool, Mr Clegg insisted the coalition was committed to “beefing up resources” so that tax was collected properly.

“I want us to be, and we will be, as hard on people who are tax cheats as people who are benefits cheats,” he said.

“You cannot ask millions of people in this country to have restraint in pay, to have their pensions looked at again because we are having to deal with the deficit and allow people who can pay an army of lawyers and accountants from getting out of paying their fair share of taxes.”

His comments came on the second day of the Liberal Democrat party conference in Liverpool. Yesterday the leader told activists the Lib Dems should enjoy the power of the coalition government.

Nick Clegg kicked off the conference urging his party to battle through the “most anxious psychological point” where it is gripped “by fear of the unknown”.

The conference began as new research showed that just over half of those who voted Lib Dem during the general election now believe Mr Clegg has “sold out”.

Reporting from the conference Political Editor Gary Gibbon said –

“The overwhelming sense in Liverpool is still unease not revolt. Former MP, David Rendel, an opponent of this coalition from the start, said you don’t back every coalition policy in pubic any more than you agree with your wife when you go to her choice of film and don’t rate the movie. Really? One for the advice columns.

“Others piled in ever so gently behind him asking for a little more distance and differentiation.

“But Danny Alexander, the uber moderniser, just got a reasonably good reception for giving a speech George Osborne would have heartily approved of…and under the “consultation” arrangements for conference speeches, No. 10 did actually approve it.”

Fleshing out the tax avoidance package in his speech to conference, Chief Treasury Secretary Danny Alexander said “There are some people who seem to believe that not paying their fair share of tax is a lifestyle choice that is socially acceptable. It is not.

“Like the benefit cheat, their actions take resources from those who need them most.

“Decisions we make in the Spending Review will ensure the taxman has the resources to be ruthless with those often wealthy people and businesses who think they can treat paying tax as an optional extra.

“Tax avoidance and evasion are unacceptable in the best of times but in today’s circumstances it is morally indefensible.”