Thieving U.K. aims to trim deficit by squelching tax evasion

LIVERPOOL, England — The British government will spend $1.4 billion clamping down on tax evasion and avoidance in a bid to raise an extra $9 billion a year by 2015, Chief Secretary to the Treasury Danny Alexander said on Sunday.

The plan, announced by Alexander at the annual conference of his Liberal Democrat party in Liverpool, will concentrate on increasing fivefold the number of prosecutions for tax evasion, forming a team of investigators to find money hidden offshore and targeting people who avoid paying the 50 percent tax rate on incomes above 150,000 pounds a year.

"We will be ruthless with those often wealthy people and businesses who think they can treat paying tax as an optional extra," Alexander told delegates. "Just like the benefit cheat, they take resources from those who need them most. Tax avoidance and evasion are unacceptable in the best of times but in today's circumstances it is morally indefensible."

The government estimates that tax evasion costs the Treasury $9 billion each year, with avoidance costing the same amount and fraud by organized crime losing the exchequer $6 billion a year. The measures are part of the coalition government's drive to narrow a record budget deficit.

Alexander and Deputy Prime Minister Nick Clegg, the Liberal Democrat leader, are trying to persuade party members at the conference of the benefits of being in coalition with Prime Minister David Cameron's Conservatives. Senior Liberal Democrats are aiming to answer critics both within the party and in the Labour opposition who say the government's program to cut borrowing will hit the poor hardest.

The public wants to see the government acting against "people who can pay an army of lawyers and accountants to get out of paying their fair share," Clegg said in a TV interview. "We will increase the number of people being prosecuted and we'll go after people putting money into tax havens."

The Institute for Fiscal Studies estimated in April 2009 that 350,000 people earned more than 150,000 pounds and were liable for the 50 percent tax rate, which was announced in that month's budget by Alistair Darling, then the chancellor of the exchequer.

The changes outlined by Alexander on Sunday do not require legislation, and the government is drawing up plans to tackle loopholes that allow legal tax avoidance, the officials said.

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Thieving U.K. aims to trim deficit by squelching tax evasion

Thieving U.K. aims to trim deficit by squelching tax evasion

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