James Murray: ‘Labour’s plan to take on the tax dodgers’

After 14 years of economic failure under the Conservatives, taxes are set to be their highest in 70 years. People across Britain are feeling the squeeze. Yet, whilst the vast majority of people play by the rules, some are getting away without paying what they owe.

We have always argued that if you make Britain your home, you should pay your taxes here. That is why we have argued throughout this parliament for the ‘non-dom’ tax status to be scrapped. After years of opposing our plans, the Tories finally agreed in last month’s Budget to follow our lead.

We have now looked through the detail of their plans. It is clear that, despite their U-turn, they have created new loopholes worth billions. These loopholes have been intentionally designed to allow non-doms to stash money away in offshore trusts so they would not be subject to inheritance tax like any other member of the public.

The Prime Minister just cannot bring himself to sort the non-dom problem once and for all. A Labour government will do so because as, Rachel Reeves has said today, we believe that if you make your home and do your business in Britain, then you should pay your taxes here too. By closing these loopholes, we will raise over £1bn in the first year and over £400m every year thereafter, and we will use that money to support our plans for the NHS and breakfast clubs.

But this issue goes beyond non-doms. Under the Conservatives, the total tax gap – the difference between the amount of tax owed and what the government collects – hit £36bn in 2021/22. That is an increase of £5bn from the year before – whilst the number of civil investigations opened by HMRC’s fraud unit has fallen by more than half in the last five years.

The truth is that tackling tax avoidance and evasion has never been a priority for the Conservatives – and with five different ministers having had responsibility for HMRC since September 2021, no wonder they have not been able to get a grip on it. Yet again, the cost of Tory chaos is hitting taxpayers.

This week, we have set out Labour’s plan to change this. We have published plans to invest in bolstering HMRC compliance officers by up to 5,000 to increase the number of investigations, tackle fraud and make sure tax owed is collected. Our investment will help make sure people pay the tax they owe and bring in £5bn of extra revenue.

At the same time, we will invest in modernising and digitising HMRC, making it easier for individuals and businesses to pay the right tax. A modern, digital tax system will reduce avoidance, boost productivity and improve service for all taxpayers. We are serious about closing the tax gap and making the tax system fit for the future.

Labour’s plan will make sure everyone pays their fair share – and by investing in public services and getting the economy growing, we will make people across Britain better off.

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