By James Chapman
Last updated at 1:03 AM on 22nd March 2011
On target: George Osborne is expected to introduce legislation cracking down on tax dodgers in tomorrow's Budget
George Osborne will announce a 1billion a year crackdown on tax avoidance by high earners and big business in tomorrow's Budget.
The Chancellor is expected to unveil a series of measures as official figures show that a record 42billion in tax a year has gone uncollected.
In one move to target the super-rich, he will announce a new duty on private jets, which currently fly untaxed.
The 'Lear Jet levy' will mean that more than 67,000 flights a year in private planes will be hit.
For commercial air passengers, air passenger duty usually costs around 12 for short haul journeys and up to 110 for long haul.
But more than 67,000 flights in private jets currently avoid paying any tax at all last year.
More broadly, the 'tax gap' soared under the last Labour government, meaning that almost ten per cent of money owed to the Exchequer was unpaid.
The Treasury hopes to raise large sums that could have be used to plug the black hole in the public finances.
Inaccurate self-assessment on income tax accounts for more than 5billion of losses.
The amount of uncollected corporation tax has jumped by 19 per cent over the last two years, from 5.8billion to 6.9billion. HMRC estimates that 14 per cent of corporation tax is now uncollected, compared to 11.5 per cent in 2006/07.
One likely move includes a crackdown on the flood of DVDs and cheap goods coming into the UK from the Channel Islands, undercutting high street shops.
The loophole allows large numbers of traders, including multinational firms, to sell goods over the internet free of VAT.
High earners also face a crackdown on offshore trusts used to avoid paying tax on bonuses.
Tens of thousands of people use 'employee benefit trusts' to shelter cash from tax, which are then used to generate loans or property purchases.
Firms are also to be stopped from changing the currency they prepare their accounts in for tax purposes.
The tax gap grew from 38billion to 42billion in 2009, according to the latest figures. It means that 9 in every 100 that ought to be collected in revenues is missed or avoided.
Experts say that the increasing pressure on HM Revenue & Customs to ramp up its efforts to collect unpaid tax will inevitably mean more tax inquiries, including some that will target innocent taxpayers.
What are they going to tax next ? Fresh air.
- hagar, Qblackpool uk, 22/3/2011 04:21
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