HMRC to 'hunt down' tax dodgers in crackdown with £855 million fund

HMRC will hunt down tax dodgers in a massive crackdown and clampdown thanks to an eye-watering £800 MILLION fund. The new Labour Party government has promised to tool HMRC and the government taxman in a bid to "close the tax gap".

The tax gap is the difference between the amount of tax which is thought to be due and the amount of tax which has been collected. The latest tax gap figures published by HMRC for the 2022/23 tax year showed a tax gap of £39.8 billion, which is 4.8% of the total tax which is thought to be due for the tax year.

Labour’s manifesto pledges to spend £855million per year on “Investment in HMRC to reduce tax avoidance”, with the intention of raising £5.23 billion in 2028/29 (including changes to non-dom taxation). In its manifesto, Labour said: “We will modernise HMRC and change the law to tackle tax avoidance.

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"We will increase registration and reporting requirements, strengthen HMRC’s powers, invest in new technology and build capacity within HMRC. This, combined with a renewed focus on tax avoidance by large businesses and the wealthy will begin to close the tax gap...”

Four per cent of the tax gap, equal to £1.8 billion, relates to tax avoidance, HMRC has found. The largest components of the tax gap are underpayments caused by failure to take reasonable care and error, according to HMRC data and statistics.

Labour said: "The head of the National Audit Office says that there is £6bn annually that could berecovered through a concerted effort on tax compliance. But the government only hasplans to recover £1bn a year in outstanding tax debt.

"At a time when the tax burden on working people is rising, Labour will relentlessly pursue the money that is owed, with a plan to make sure people pay the right tax in the first place, and that directly tackles tax avoidance and evasion."