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Labour to outline proposals aimed at tackling tax avoidance

REFORMS to tackle avoidance and deliver fairness in the business tax system will be outlined by Labour next week.

Shadow Chancellor Ed Balls and Shabana Mahmood, Labour's shadow exchequer secretary, will publish the proposals following wide-ranging consultation with business and other experts.

Labour is also tabling an amendment to the Finance Bill next week urging the government to act to close the eurobonds loophole, which has been estimated to cost up to £500 million a year in lost revenues.

Mr Balls said: "At a time when working people are facing a cost-of-living crisis and the deficit is high, it's vital that everyone pays their fair share and we restore public trust in the tax system.

"High profile cases of tax avoidance have undermined both public trust in company taxation and also hit businesses who play by the rules.

"The next Labour government will act to tackle tax avoidance including by closing loopholes, increasing transparency and ensuring we have tougher independent scrutiny of the tax system."

The eurobond exemption is used by some companies to shift profits out of the UK. Businesses legitimately using the exemption to obtain finance from international bond markets would be able to continue doing so, said Labour, but those who use it as a loophole to move profits to companies in tax havens will stopped.

There will also be a hardline on tax havens with UK Overseas Territories and Crown Dependencies who are dragging their heels forced to publish the names of beneficial owners of companies in a move intended to make clear who owns firms and how much they are paying in taxation.

There will also be measures to tackle dormant companies which can be used to avoid filing corporate tax returns and efforts to crack down on tax avoidance in the construction industry.

Mr Balls said that the amount of uncollected tax had increased last year.

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