Stop firms abusing tax rules: Clegg

Updated: 
Nick CleggThe Government should impose rules on big business to stop firms abusing the system to avoid tax, Nick Clegg has said.

The Deputy Prime Minister said ordinary people were frustrated by the ability of the wealthy to hire an "army" of accountants to slash their tax liability.
The Liberal Democrat leader said he could not write George Osborne's 2012 budget for him, but added that he thought an anti-abuse rule was possible.

Mr Clegg said: "I think there are millions of people - and these are people who the Liberal Democrats are in politics for - who pay their taxes, who work hard, who aspire to do the right things for themselves and their families, who are quite rightly angered there is a wealthy elite of large businesses who can pay an army of tax accountants to get out of paying their fair share of tax.

"They basically see paying tax as an optional extra, they pick and choose the taxes you pay. That's why I insisted we write into the coalition agreement, as we did when we started the Government 18 months ago, that we clamp down on tax avoidance, including working up long-standing Liberal Democrat ideas - for instance, to apply a new general anti-avoidance rule.

"There should be a general rule that you can't play the system, you can't abuse the system.

"We have received a report from an expert, Graham Aaronson, who has provided a report to the Treasury, that says what he calls an anti-abuse rule is feasible.

"I very much hope, and I'm not going to write George Osborne's budget, we can make progress on that in the budget. We have got to make sure the tax system is fair."

Mr Clegg highlighted achievements already made by the Liberal Democrats in Government, including the raising of the income tax allowance and the pupil premium in schools.

He said the overall goal was to rebalance the tax system away from taxation on work and earnings towards taxing unearned wealth, but refused to comment specifically about a mansion tax.

© 2012 Press Association

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