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Millionaire tax avoiders 'shock' chancellor
George Osborne examined anonymous tax returns submitted to the Inland Revenue.Related Stories
The chancellor has said he is "shocked" that some of the UK's richest people have organised their finances so that they pay virtually no income tax.
George Osborne told the Daily Telegraph the very wealthiest should be paying around a third of their income in tax.
He said he had seen "anonymised copies" of tax returns which showed him that some of the highest earners paid an income tax rate averaging at just 10%.
He said he would take "further action" but did not outline any new proposals.
HM Revenue and Customs provided the chancellor with the confidential tax returns submitted to the organisation by the UK's wealthiest people, the Telegraph reported.
Legal loopholesHe was not given the details of the individuals involved, but he said the returns he had seen had shown him the 20 biggest tax avoiders had legally reduced their income tax bills by a total of £145m in a year.
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The general principle is that people should pay income tax and that includes people with the highest incomes”
He said: "I was shocked to see that some of the very wealthiest people in the country have organised their tax affairs, and to be fair it's within the tax laws, so that they were regularly paying virtually no income tax. And I don't think that's right."
"I'm talking about people right at the top. I'm talking about people with incomes of many millions of pounds a year.
"The general principle is that people should pay income tax and that includes people with the highest incomes," Mr Osborne added.
HMRC has found that some people use legal loopholes to reduce their bills.
These include writing off business losses, offsetting the cost of business mortgages and borrowing on buy-to-let properties against their income tax bills.
Other ploys include taking advantage of tax relief on charitable donations.
Charitable donationsDuring last month's Budget the chancellor revealed that, from 2013, there would be a £50,000 cap on tax relief.
Although this was criticised by charities who feared they would lose out, on Tuesday Mr Osborne said the government was still examining ways of encouraging philanthropy and charitable giving.
Last month, Mr Osborne said he would cut the 50p top rate of income tax to 45p from April 2013, therefore reducing the tax bills for those earning more than £150,000 a year.
BBC political correspondent Iain Watson said while many of Mr Osborne's own MPs congratulated him for the move, the cut proved to be less popular with voters.
This latest interview, our correspondent says, suggests the chancellor is trying to move the focus from his tax cut to the government's desire to tackle tax avoidance.
Mr Osborne defended the cut in the Telegraph, saying: "I've come up with a Budget that has reduced the 50p rate to 45p, so we don't have the highest income tax rate in the world.
"But I've also asked people who are currently paying zero to pay income tax."
Related Stories
- New plans to tackle tax avoidance 28 MARCH 2012, BUSINESS
- Charities could lose big donors 21 MARCH 2012, BUSINESS
- Corporation tax: Easy to avoid? 05 APRIL 2012, BUSINESS
- Budget 2012: What's in it for you? 21 MARCH 2012, BUSINESS
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Reuters UKPRESS DIGEST - British business - April 1048 mins ago
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