26-05-04

Barrett calls for investigation into lost company tax billions

John Barrett, Scottish Liberal Democrat MP for Edinburgh West, today called on the Government to launch an investigation into the tax avoidance by UK companies that costs the country billions of pounds.

Since 1989, the amount raised from income tax has increased in cash terms from £49 billion to £115 billion. However, the tax take from corporation tax has only increased from £21 billion to £28 billion. Part of this has been attributed to the tax avoidance schemes being devised by banks and accountancy firms.

Mr Barrett is one of over 30 MPs who have supported a cross party parliamentary motion calling for a full investigation.

In a statement, Mr Barrett, said:

"No one enjoys paying tax but it is this money that pays for our schools, hospitals and police.  Although companies are not doing anything illegal, their exploitation of tax loopholes in the law is costing the UK billions of pounds in lost revenue, money that could be invested in our public services.

"By limiting the tax take, these very clever tax avoidance schemes being developed by some banks and accountancy firms only service to shift the tax burden onto ordinary people.  Because of the sums of money we could be talking about, the Government needs to hold an early investigation.  That way, any changes to the law can be made as soon as possible."

ENDS