The Green Party has committed to closing a controversial tax loophole that allows private equity bosses to avoid paying the correct amount of income tax.
Natalie Bennett, the leader of the Green Party, has today called on other party leaders to join her in pledging to clampdown on the so-called ‘Mayfair Tax loophole’.
So far only the Green Party has committed to shutting down the loophole.
The call by the Green Party comes after an amendment from Caroline Lucas MP on the Finance Bill, aimed at clamping down on the ‘Mayfair Tax loophole’, failed to be debated in Parliament this week because of time limitations.
'The tax loophole allows private equity executives to pay relatively low rate of tax on the profits the funds they manage make from buying and selling companies.
This is achieved by classifying this profit (known as 'carried interest') as capital gains rather than salaried income. Campaigners argue that they should pay income tax like everyone else, because 'carried interest' is the profit they make from doing their job. campaign group 38 Degrees estimates that the loophole costs the exchequer up to £700m a year.
Natalie Bennett, leader of The Green Party, said:
“We urgently need to get a handle on tax avoidance in this country. The Mayfair tax loophole, which benefits some of the country’s highest earners while depriving the Government of up to £700 million, must be closed.
“It can’t be right that bosses in private equity firms pay a different rate of tax to their counterparts across town in the City of London.
It’s time that the political parties come together to tackle tax avoidance. I hope that the leaders of the Conservative, Labour and the Lib Dems will join me in pledging to shut down this loophole.”
Caroline Lucas, Green MP for Brighton Pavillion, said:
“Successive governments have failed to take concrete action despite talking tough on tax dodging. The Mayfair loophole is government-sponsored tax avoidance, and it’s estimated that it’s losing us up to £700 million a year. None of the bigger parties would be drawn on this in Parliament yesterday, so I hope they’ll now take the opportunity to do the right and fair thing.”
Amy Lockwood, from Campaign Group 38 Degrees, said:
"The Mayfair loophole is the ultimate test of whether political parties are truly serious about cracking down on tax dodging. Why should city finance bosses pay a lower rate of tax than nurses or teachers?
The fact that the Green Party have already promised to close the Mayfair loophole is proof that people-power is working. Tax-dodging is rising up the election agenda - this is a loophole that's going to be impossible for political parties to ignore."
ENDS
NOTE:
1) The 38 Degrees report on the ‘Mayfair Tax Loophole’ is available here: https://secure.38degrees.org.uk/closing-the-mayfair-loophole-report