Labour's tax return demand bids to end big firm 'loophole and scams'

Labour wants the UK's biggest firms to publish their full tax returns in a bid to close down "loopholes and scams" and recoup unpaid tax worth up to an estimated £9.5 billion.

Shadow chancellor John McDonnell said the party wanted to "pour the disinfectant of sunlight on large company accounts" to help HM Revenue and Customs narrow the vast gap between tax owed and tax paid.

Labour's plans, which follow repeated criticism of the tax affairs of giant companies, would apply to firms with a turnover over £36 million, a balance sheet over £18 million or more than 250 employees.

Under the requirement the companies would be forced to file tax returns at Companies House along with their annual accounts.

Mr McDonnell said: "Tax avoidance is a scourge on society that company secrecy laws help facilitate, and the Tories have done nothing to tackle.

Google was last month accused of being 'less than transparent' after revealing its latest UK tax payments. Credit: PA

"Labour will pour the disinfectant of sunlight on large company accounts, helping close down the loopholes and the scams that the tax dodgers rely on.

"The Tories are running a rigged economy for the super-rich and giant corporate tax dodgers. Only Labour will stand up for workers and small businesses to make our tax system fair and our public services like education and the NHS protected."

The party argue that while large companies can hire accountants and lawyers and "wine-and-dine senior civil servants and other policymakers", many comparatively small companies are not in a position to secure any such "sweetheart deals".

Labour has said recouped taxes could help end the government's era of austerity. Credit: PA

Labour said the era of austerity could end if the Exchequer could receive even a fraction of the estimated £13 trillion worldwide hidden in tax havens.

Conservative Party vice-chairman Stuart Andrew rejected the proposals, saying: "This Government has a simple message for those who avoid tax: You must pay what you owe and we will make sure you do.

"After 13 years of Labour doing nothing we have led the way on tackling tax evasion, avoidance and non-compliance, securing an additional £140 billion in additional tax revenues since 2010.

"All Labour would do now is wreck the economy with higher taxes, half a trillion in additional borrowing and a leader who says we should not be afraid of debt."