New tax gap figure
John McDonnell MP, Labour’s Shadow Chancellor, commenting on HMRC figures showing that the 2017/18 tax gap was £35 billion, said:
“The tax gap is another reminder of the scale of tax evasion in this
country under a Tory Government – and it is likely to be an
underestimate since it does not capture much tax avoidance or
profit-shifting.
“But the gap is also the product of the Government’s savage cuts to
HMRC, which have deskilled and undermined a key part of the civil
service.
“A Labour Government will be uncompromising in tackling tax avoidance
and evasion, and will implement a comprehensive policy programme to
achieve this aim.”
Ends
Notes to Editors
- HMRC has today released figures estimating that the tax gap – “the
difference between the amount of tax that should, in theory, be paid to
HMRC, and what is actually paid” – is £35 billion. HMRC accepts that the
tax gap is a product of miscalculations, as well as “legal
interpretation, evasion, avoidance and criminal attacks”. This amounts
to 5.6% of total theoretical tax liabilities, an increase of 0.1% from
the last figure released in 2016-2017. See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/810119/Measuring_tax_gaps_2019_edition.pdf. - Labour’s Tax Transparency and Enforcement Programme (2017) is available here: https://labour.org.uk/wp-content/uploads/2017/10/Tax-transparency-programme.pdf. This includes a General Anti-Avoidance Rule and a suite of other measures to tackle avoidance and evasion.
- HMRC had 104,000 staff in 2006, and had approximately 60,000 by 2019
(figures from the Public and Commercial Services Union). It is
estimated by PCS that 17,000 years of experience were lost to HMRC from
redundancies in 2017. - Labour’s 2017 manifesto committing to giving HMRC “the resources and
skills necessary to clamp down hard on those unscrupulous few
individuals and companies who seek to avoid the responsibilities that
the rest of us meet”: https://labour.org.uk/wp-content/uploads/2017/10/labour-manifesto-2017.pdf. - Labour also costed the hiring of “more tax collection staff”: http://labour.org.uk/wp-content/uploads/2017/10/Funding-Britains-Future.pdf