September 9, 2007 / 2:53 PM / 12 years ago

Unions say close tax loophole to meet poverty goal

A mother is seen lifting her child in this undated file photo. Britain could meet its goal to halve child poverty by 2010 if it closed a loophole that allows more than 100,000 high earners to avoid paying tax on their overseas income, the Trades Union Congress said on Sunday. REUTERS/KieranDoherty

BRIGHTON (Reuters) - Britain could meet its goal to halve child poverty by 2010 if it closed a loophole that allows more than 100,000 high earners to avoid paying tax on their overseas income, the Trades Union Congress said on Sunday.

Child poverty costs each person in Britain an estimated 600 pounds per year, and improving conditions for the poor will require about 4 billion pounds per year through extra benefits and tax credits.

“This amount could easily be raised by closing the tax loopholes of the super-rich,” TUC chief Brendan Barber told reporters in Brighton on the eve of an annual union summit.

“Ending the widespread abuse of the non-domiciliary tax break ... and replacing it with a proper test of residency, on conservative estimates, can easily raise four billion pounds a year.”

High earners can avoid paying tax on overseas earnings by claiming they are not domiciled in Britain, although they must pay tax on income in Britain at a higher rate than low earners.

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