New ‘aggressive’ measures to deal with stamp duty tax avoidance will form part of Wednesday’s Budget, Chancellor George Osborne has confirmed.
Speaking to the BBC, he vowed to put an end to the ‘completely unacceptable’ practice of purchasing properties through offshore companies in order to avoid paying stamp duty.
He warned that the Budget will come down hard on tax avoidance and reiterated that those who avoid paying stamp duty will face significant fines.
George Osborne said: “We are going to come down on stamp duty tax avoidance like a tonne of bricks, we are coming after that tax avoidance, we are going to be extremely aggressive in dealing with it, and people are going to face a very punitive charge.”
Currently in the UK, properties valued at £125,000 and over are liable for a one per cent stamp duty charge, increasing to five per cent for houses costing in excess of £1 million.
Opposition MPs, however, have condemned the Chancellor’s approach to the Budget, specifically calling for plans to cut the 50p rate of tax for higher earners as ‘out of touch’ with the majority of taxpayers. The 50p tax rate paid on earnings over £150,000 was introduced by the last Labour government.
Shadow Chancellor Ed Balls said: “For families on middle or low incomes, seeing their petrol prices up, their fuel bills up, their living standards squeezed, youth unemployment rising, the idea that George Osborne is saying the number one priority is to cut taxes for those on £150,000 – they can’t be serious; it’s totally out of touch.”
Ed Balls also accused George Osborne of not using the Office of Budget Responsibility (OBR) to obtain an independent report into the effectiveness of the 50p tax rate. George Osborne is expected to announce the results of a HMRC report into the tax on Budget day itself, with Treasury officials speculating that revenues will fall short of the £6.5 billion originally estimated, according to The Financial Times.
Commenting on this week’s Budget, John Cridland, director general of the Confederation of British Industry (CBI) dismissed the Chancellors proposals to reduce tax, saying: ‘We should be focused on growth, and what businesses are asking for this Budget are measures which deliver it.’
‘The country cannot afford significant tax cuts if we want to see growth.’
He said that ‘targeted’ measures should instead be implemented into infrastructure and to support small businesses. ‘Cutting deficit should be the number one priority,’ he added.
