15/01/2012 09:20 GMT

Ed Miliband To Call For UK Tax Havens Crackdown

Labour leader Ed Miliband is to call for an end to UK tax havens as part of his drive for a fairer society, party sources said today.

Miliband will demand UK residents with money abroad are required to pay tax and are no longer allowed to stash large sums in foreign accounts where they can go unnoticed by the Revenue and Customs.

He is expected to demand the closure of loopholes within existing legislation which allow British resident taxpayers to hide money in offshore accounts based in places like the Channel Islands and Isle of Man.

Under current rules, incomes can remain hidden behind front companies and trusts which mean the tax man never has to know those really involved.

The Labour leader also wants to stop anyone from avoiding tax by investing in complex financial products, rather than in simple bank accounts, which allows them not declare certain information.

A party source said: "In these tough times, when unfair choices are being imposed on people - like cuts to tax credits, or changes to child benefit, everything needs to be done to ensure those that owe tax pay their fair share.

"This is part of what Ed Miliband meant when he said on Tuesday that Labour can still make Britain a fairer place, even when there is less money around."

Miliband wants the Government to clamp down on tax havens in the Channel Islands and also raise the issue at EU-level as part of an effort to save the Treasury billions of pounds a year.

The source added: "We would start with diplomacy, as that is what has worked in the past.

"And if they won't comply voluntarily the Government should repeat the tough stance the last Labour Government took with them - threatening to put them on the (OECD) blacklist if they remain uncooperative, which would discourage investors into these tax havens."

David Cameron has also pledged to crackdown on on big companies who use "fancy corporate lawyers" to get their tax bills down.