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Cameron tells HMRC to act tougher with big business

Deputy leader Nick Clegg said people are angered that big business doesn't play fair

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Prime minister David Cameron said on Thursday the taxman should toughen its stance on big businesses in tax negotiations.

His comments follow the publication in December of a report by MPs that was highly critical of HMRC for treating large corporate "more favourable" than other taxpayers.

That perception is damaging for the Conservative-led coalition government seeking to avoid being branded as a privileged elite at a time when families and small businesses are under pressure from swingeing public spending cuts and stagnating economic growth.

Cameron and deputy prime minister Nick Clegg, leader of the Liberal Democrats, signalled that cracking down on tax avoidance will be a key theme running up to the annual budget in March.

"I think we need a tougher approach (from HMRC)," Cameron told a group of small business leaders, in response to a question about tax deals for mobile telecoms group Vodafone and US investment bank Goldman Sachs.

"One of the things we're going to be looking at this year is whether there should be a more general anti-avoidance power that HMRC can use, particularly on wealthy individuals and on the bigger companies, to make sure that they pay their fair share," Cameron said.

He was referring to a so-called "general anti-abuse rule" or GAAR, a new power which the government is considering giving to HMRC to help it tackle tax avoidance.

Left-wing activists have sought to shine attention on companies which they say are failing to pay as much tax as they should, most notably in a protest at Vodafone's main London store in 2010. The company says it does not owe any tax.

"Millions of people who play by the rules, who pay their taxes, who work hard ... are angered when they feel there is a wealthy elite or large businesses who can pay an army of tax accountants to get out of paying their fair share of tax," Clegg told BBC Radio 4 on Thursday.


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