Britain’s Treasury chief has pledged to crack down on tax avoidance and evasion in the first budget put forward by an all-Conservative government in nearly two decades.
Freed from the constraints from past Liberal Democrat coalition partners in government, Chancellor of the Exchequer George Osborne also announced major cuts on welfare spending in a budget in which he pledged to “put economic security first.”
He rewarded Conservative voters with tax cuts for middle-earners and those inheriting family homes and pledged to bolster plans for a so-called northern powerhouse, pushing for the creation of another major economic centre that would rival London.
But it was on tax policy that some of the boldest moves were made.
He abolished special privileges for so-called permanent non-doms, or people who live in the country but don’t claim legal residence.
The status offers tax advantages and has been widely criticised.
The practice has allowed some of the world’s wealthiest people to live in Britain and pay no tax on earnings and capital gains outside the country.
Osborne said changes might cost the country money, but that an issue of fairness was at hand.
“It is not fair that non-doms with residential property here in the UK can put it in an offshore company and avoid inheritance tax,” he said.
“From now on they will pay the same tax as everyone else. And most fundamentally, it is not fair that people live in this country for very long periods of their lives, benefit from our public services, and yet operate under different tax rules from everyone else.”
He said that after a consultation, anyone who is resident in the UK for more than 15 of the past 20 years will now pay full British taxes on all worldwide income.
Osborne also said a levy on banks would be gradually reduced over the next six years, while a new eight per cent surcharge on bank profits will be introduced from January 2016.