Tackling Tax Loophole

There's growing support from Scots to close a tax loophole, according to campaign group 38 Degrees.

An investigation has revealed that many private equity firms are using a government-backed tax loophole to avoid paying £700 million in tax a year.

The report claims a deal, brokered between HMRC and industry lobbyists, allows multi-millionaire fund managers to pay tax on much of their income at 285, with some able to pay a tax rate of just 10%. 

The practice is legal; however campaigners believe it's unfair.

The investigation has also uncovered millions of pounds worth of party political donations from private equity bosses to the Conservatives, Liberal Democrats and Labour. Since 2008, donors from the private equity industry have handed £7.19 million to the Conservative and Liberal Democrat parties, while the industry's lobby group, the BVCA, is the second-largest funder of Labour group Progress. 
 
More than 1 in 6 of the Conservative donors to have attended David Cameron's 'donor dinners' in 2014 were private equity bosses. 
 
38 Degrees campaigners in Scotland are calling on Chancellor George Osborne to announce the closure of the Mayfair loophole in his March Budget. The government's 2015 Finance Bill currently protects the Mayfair loophole for private equity managers, despite containing other anti-avoidance measures. 
 
38 Degrees executive director David Babbs said: "This Mayfair tax loophole is government-sponsored tax avoidance on a breathtaking scale.
 
"Money which should be funding the NHS is going to millionaire fund managers instead. The rest of us pay in our fair share to keep the country going: why should millionaire financiers be treated differently?
 
"In his last Budget before the election, George Osborne wants to convince the country that he's on the side of hardworking families on average incomes. If he wants us to take him seriously, he's got to close the Mayfair tax loophole."