Do you suppose Rachel Reeves’ conflict on tax dodgers will work? Take our ballot
Rachel Reeves has waged war on tax dodgers, aiming to claw back billions for vital public services – but do you think her plan will work?
The Chancellor aims to bridge the staggering £39.8 billion tax gap by going after those who avoid or evade their fair share of taxes. To bolster these efforts, Reeves will deploy 200 new experts starting in November, with plans to expand this team by 5,000 over this Parliament.
This decisive action comes as Reeves faces a daunting £22 billion hole in the public finances left by the Tories ahead of next month’s Budget. In a speech at the Labour Party conference today, she will say: “At a time of hard choices, I will not tolerate the minority who continue to avoid paying what they owe. If you make your home and do your business in Britain, then you should pay your taxes here too. Those are my values. They are the Labour Party’s values. And they are the British people’s values.”
According to HMRC estimates from 2022/23 reveal a a multi-billion pound gap exists between what should be collected in taxes and the actual amount received. Notably, wealthy individuals and businesses evading taxes, along with criminals smuggling alcohol and tobacco, accounted for roughly 24% of this tax gap last year.
If you can’t see the poll, click here
Other contributing factors include the “hidden economy”, which made up 6%, as unregistered businesses and under-the-table workers skimp on taxes. The largest share comes from individuals who fail to “take reasonable care” with their taxes (30%), with carelessness or errors making up an additional 15%. Tax avoidance – where wealthy individuals or companies exploit loopholes to minimise their tax bills, such as through offshore tax havens – represents about 4%.
Reeves says she’s committed to supercharging HMRC’s capabilities to recover this lost revenue for public services, promising: “We will give it the resource it needs to go after those who are avoiding or evading tax, and we will modernise it so we have a system that is fit for purpose.”
Ahead of the Budget, the Chancellor will underline that “there will be no return to austerity” after Keir Starmer made a vow to Mirror readers at the weekend. She will say: “Conservative austerity was a destructive choice for our public services – and for investment and growth too. We must deal with the Tory legacy and that means tough decisions. But we won’t let that dim our ambition for Britain.”
