...or "Seeing as everyone else is now giving 'fact-checking a go'".

When Labour published its 2019 Election manifesto last week it was accompanied by a document entitled "Funding Real Change" which set out where Labour intended to get the extra £82.9bn a year its ambitious proposals would require from. That included £6.2bn a year from a "Fair Tax Programme" the details of which have now also been published.

The £6.2bn comes from just two measures. An extra £2.9bn a year (on average) from individuals filing self-assessment returns (as a direct and indirect result of an additional 200,000 targeted audits per annum) and £3.3bn a year from a "small levy" on offshore companies buying UK residential property (in addition to existing SDLT and ATED).

So how accurate is that figure and can everyone else breathe a sigh of relief that they are not a target? Answers: not very and no.

I think it is reasonable to say that if the programme were implemented in full it is highly unlikely that it will raise an additional £6.2bn per annum. It might be less, it could be an awful lot more. For example, in anticipating one potential challenge the paper notes that:

"It is wrong to assume that all offshore companies will switch to UK company vehicles leading to zero yield: perceived benefits of remaining offshore include secrecy and privacy, as well as offshore tax advantages, and if offshore companies do switch to being UK companies they will have to pay corporation tax in the UK."

That rather seems to ignore the fact that under Finance Act 2019, offshore companies with UK residential property will have to pay corporation tax in the UK on their income with effect from 6 April, 2020 and have had to pay corporation tax on their gains since 6 April, 2019. An additional 20% levy seems a lot to pay for the alleged benefits of "secrecy and privacy". The paper also notes that they may well have underestimated the total yield because they have only costed two measures out of a 35 point plan.

One of the other proposed measures is a 9 month public enquiry to "investigate common tools of avoidance and evasion, and recommend policy measures to eliminate these tools." However, expressly in scope of that enquiry would be investigating "the tax treatment of equity and debt, to inquire into whether steps should be taken to ensure debt and equity are treated equally for taxation purposes." Two observations on that: 

• It is a very rare enquiry or consultation that concludes everything is tickety-boo and no change is recommended. 
• It would be very surprising if equalisation were achieved by introducing tax deductibility for equity. But further restricting the tax deductibility of interest beyond the OECD recommended corporate interest restriction and myriad of existing anti-avoidance rules could have a dramatic impact - both on the tax yield, which could go either way, and the UK's tax competitiveness.

Another measure coming in for scrutiny is the quoted Eurobond exemption. The focus seems to be on whether or not The Channel Islands Stock Exchange should be a "recognised exchange". The reason for picking on the poor Channel Islands Exchange seems to be a 2013 article in The Independent. That article is cited as the source for the paper’s statement that: "Independent estimates have put the tax lost at £0.5 billion per year". Two observations on that as well: 

• Rather oddly, the article doesn't actually include an estimate of tax lost at £500m as such. Instead, it merely states that: "An HMRC spokesman said the department did not recognise that £500m was being lost". 
• Since that newspaper article was written six years ago, the relevant tax landscape has changed dramatically following, in particular, the UK's implementation of the BEPS proposals around hybrids and interest deductions.

Point 8 is to review Advance Thin Capitalisation Agreements (ATCAs) with "the aim of drastically reducing [their] number" because they are often used by companies to avoid taxation. Really? All an ATCA does is effectively frontload the discussion of whether any loan is on arm's length terms. It does not preclude any other enquiry into the loan and the proposal sits rather oddly with the emphasis on transparency in the rest of the paper – why would you want to dissuade taxpayers from approaching HMRC on a full disclosure basis in advance of entering into a loan?

Point 12 is to toughen up the general anti-abuse rule (GAAR) and remove the Advisory Panel safeguard. Many advisors would, however, struggle to identify real examples of avoidance transactions that are not caught by current anti-avoidance rules, would survive going to court (given HMRC's strong recent track record) and are not caught by the existing GAAR "sweeper".

Labour clearly think there are a lot of problems with the tax system which they want to fix. But, understandably, as they are not currently in Government, and taxpayers' affairs are, at least for the time being, confidential (proposals 4 and 5 are to make large companies and wealthy individuals publish their returns), they may not have the necessary information to be able to tell whether some of the perceived problems are real and their scale.

No-one can accuse Labour of lacking ambition, but the jury is definitely still out as to whether some of the problems Labour identify really exist and need fixing, or whether the fixes might themselves do more harm than good.