HMRC is set to be handed £855M to hunt down fraud and tax dodgers in a new law change aimed at weeding out wealthy tax avoidance.
Labour has pledged to ‘strengthen’ HMRC’s powers and will use money raised by closing non-dom status and offshore trust loopholes to spend money on a new tax avoidance clampdown to check people’s accounts are accurate and ‘paying their fair share.’
HMRC will be ‘modernised’ with a law change that will ‘strengthen HMRC’s powers’ says the new government, with a ‘renewed focus on tax avoidance’.
Labour, which has won the election, has promised in its manifest to bolster His Majesty’s Revenue and Customs with an £855M fund.
It said: “We will modernise HMRC and change the law to tackle tax avoidance. 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 and ensure everyone pays their fair share.”
To fund it, Labour is planning to take aim at non-dom status, offshore trusts avoiding inheritance tax and private equity pay being treated as capital gains instead of income.
Labour’s manifesto adds: “Labour will address unfairness in the tax system. We will abolish non-dom status once and for all, replacing it with a modern scheme for people genuinely in the country for a short period. We will end the use of offshore trusts to avoid inheritance tax so that everyone who makes their home here in the UK pays their taxes here. Private equity is the only industry where performance-related pay is treated as capital gains. Labour will close this loophole.”
