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< Back to all posts 17 February 2023

We need to tackle tax avoidance

The British Virgin Islands – dubbed a ‘

financial secrecy hub ’ by our international partners Tax Justice Network – was this week listed as “non-cooperative” on tax matters by the European Union .

Many will argue that it’s fair enough to list the British Virgin Islands as a place that helps the wealthy and powerful to avoid tax.

When people think of tax havens they often think exclusively of idyllic Caribbean islands. But this isn’t the whole story.

There is a conspicuous absence of any European countries from the EU list of countries that are “non-cooperative” on tax issues.

Tax Justice Network (TJN) have highlighted the EU’s own “axis of tax avoidance” : Switzerland, Luxembourg and the Netherlands. These countries help big companies slash their tax bills.

TJN also estimate that ​​EU member states are losing over $17 billion in corporate tax a year from US firms abusing the law.

We’ve been campaigning for years for concerted global action against this sort of behaviour. Only once we close loopholes across the world will tax avoiders have nowhere to turn.

The UK itself is also a major hub for dirty money. With our allies, we won a big victory in this campaign for transparency two weeks ago when the UK property register finally went live . It forces overseas individuals to reveal themselves as the true owners of UK property, an asset which was often a vehicle for money laundering in the past.

This is a good example of how campaigning can work. We teamed up with anti-corruption groups, MPs from the Conservatives and Labour, as well as a number of investigative journalists to push the government to act.

Council tax debate

Council tax is set to rise by as much as five per cent in most local authorities this year. This could be ruinous for many households with already stretched finances.

And beyond this, council tax is simply unfair. Poorer households pay a much higher proportion of their income in council tax than do richer households. Someone living in a mansion in Westminster might be paying less council tax than someone in a two up, two down in the north of England. This is partly due to outdated council tax bands that haven’t been updated since the 1990s.

Council tax is necessary and useful – an increasing proportion of the money raised by local authorities pays for services like children and adult social care – but it must be reformed so richer households pay more.

I spoke to the Big Issue and appeared on Talk TV and GBNews this week to discuss the crisis in local authority spending and the difficulties that rising levels of council tax place on poorer families.

We support the cross-party Fairer Share campaign for a reformed approach to council tax that would see 3 in 4 people pay less.