Chancellor George Osborne confirmed to me at today’s Treasury Questions that the Coalition Government is cracking down on various tax avoidance schemes.
The Treasury team of ministers answer questions from MPs each month. As co-chair of the Lib Dem Treasury and Business Parliamentary Committee I always ask a question. Today I highlighted the tented occuptations of St Pauls in London and College Green in my Bristol West constituency. Whatever your feelings about their tactics and the coherence of their grievances, one thing that resonates strongly with the public is the feeling that some people are not paying their fair share of tax.
I specifically asked about blocking the practice whereby senior company executives are being awarded large loans that are effectively never repaid. Income tax would still be payable on the notional interest foregone by the employer as this represents a benefit in kind. But the principal of the “loan” would not attract tax, even though it would be freely spendable by the employee. This tax avoidance scheme is called “disguised remuneration”.
This years Budget proposed to block the scheme. When it came to the implementation in the Finance Bill guess which party opposed the measure? Step forward Mr Balls and his unmerry band. I used to think the more decent Labour MPs were horribly embarrassed by Mandelson’s relaxed attitude to the “filthy rich” and the hands off approach of Brown to the City. It seems nothing has changed…