Tory tax avoidance failure has cost the country £12.8bn, claim Labour

Posted On: 
4th September 2017

Some 365 new schools or 21 new hospitals could have been built by Conservative ministers since 2010 had they taken bold action on tax avoidance, Labour claimed today.

Labour said it would reinstate lost HMRC staff to better investigate tax avoidance if elected
Credit: 
PA Images

New analysis by the House of Commons library showed at least £12.8bn went uncollected by the Exchequer between 2010 and 2015 through legal loopholes for getting around tax.

But the Government insisted it had introduced more than 75 measures to tackle tax avoidance and illegal evasion and had collected £160bn in extra tax since 2010.

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Shadow Chief Secretary to the Treasury Peter Dowd argued the cash could have gone towards repairing every road in England and Wales or reducing the budget deficit by 5%.

“Tax avoidance is a scourge on society that undermines public trust and deprives our public services of the funds they desperately need, but the Conservatives have consistently failed to tackle it,” he said.

“The Tory Government is tinkering around the edges and trumpeting new gimmicks while creating new tax loopholes that allow the wealthy and super-rich to avoid paying their fair share.

“Only a Labour Government will take the necessary steps to tackle tax avoidance and offshore trusts and create an economy that works for the many not the few.”

Labour argued the figure could in fact be even higher – as the Commons analysis uses HMRC figures which some think are underestimations.

It has pledged to reverse staff cuts to HMRC and, increase corporation tax and clamp down on firms that offer aggressive tax avoidance schemes.

The entire tax gap – including illegal tax evasion, criminal activity and simple error – stood at £36bn in 2016 according to HMRC.

But a Treasury spokesperson said: "The UK has one of the lowest tax gaps in the world and we continue to take action to ensure everyone pays the tax they owe.

"Since 2010, we have collected £160bn for our public services that would have otherwise gone unpaid."