London Daily

Focus on the big picture.
Thursday, Jul 03, 2025

Labour's Tax Crackdown: Boosting HMRC to Fund NHS and School Breakfast Clubs, Raising £5.1bn Annually

Labour plans to fund policies on the NHS and school breakfast clubs by increasing tax collection efforts, promising up to £555m for officials.
This is expected to raise £5.1bn annually.

Rachel Reeves, the shadow chancellor, accused the Conservatives of failing to address tax dodging.

The Conservatives introduced 200 measures to combat tax non-compliance, but the Labour Party cannot yet specify how they will fund their promises without raising taxes.

Labour had previously planned to pay for these pledges by replacing the UK's non-dom tax regime.

The UK government is planning to change tax rules for non-domiciled individuals, who live in the UK but pay taxes in their home country, to fund a cut to National Insurance.

This move has raised questions for the Labour party, which has a self-imposed rule against borrowing for day-to-day spending.

In response, Labour's Shadow Chancellor, Rachel Reeves, has proposed an alternative plan to increase tax collections.

According to Labour, the tax gap between what is owed and what the government collects was £36bn in the 2021/22 financial year.

The Labour party proposes increasing funding to tackle tax evasion and fraud by investing £555m in hiring more tax officers and digitizing the tax office.

This approach is estimated to raise £5.8bn annually by the end of the parliament.

The National Audit Office head suggested the government could save £6bn yearly by addressing tax evasion and avoidance.

Labour aims to provide HMRC with the necessary resources to investigate tax evaders and modernize the tax office.

HMRC has been calculating the tax gap since 2005.

The text discusses the reduction of the gap between the UK's tax revenue and spending, which has fallen from 7.5% in 2005 to 4.8% in 2021/22.

The Labour party supports the proposed replacement of non-dom rules but suggests strengthening it by including foreign assets held in trust within UK inheritance tax and removing a 50% discount in the first year of the new rules.

These changes could bring in £1bn in one year and £2.6bn over the next Parliament.

The Liberal Democrats believe these changes are not enough and have proposed fully-costed plans to fund care for everyone.

It's common for governments to announce plans to increase revenue by reducing tax avoidance or evasion.

The text discusses the UK government's plan to increase corporation tax to help pay for COVID-19 recovery efforts.

However, the author notes that the Office for Budget Responsibility has expressed uncertainty about how much revenue this measure will actually generate and how quickly it can be brought in.
Newsletter

Related Articles

0:00
0:00
Close
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
Poland Implements Border Checks Amid Growing Migration Tensions
Political Dispute Escalates Between Trump and Musk
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
US Senate Votes to Remove AI Regulation Moratorium from Domestic Policy Bill
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
Jury Deliberations in Diddy Trial Yield Partial Verdict in Serious Criminal Charges
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
King Charles Plans Significant Role for Prince Harry in Coronation
Two Chinese Nationals Arrested for Espionage Activities Against U.S. Navy
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
Trump Administration Considers Withdrawal of Funding for Hospitals Providing Gender Treatment to Minors
Texas Enacts Law Allowing Gold and Silver Transactions
China Unveils Miniature Insect-Like Surveillance Drone
OpenAI Secures Multimillion-Dollar AI Contracts with Pentagon, India, and Grab
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Elon Musk Critiques Senate Budget Proposal Over Job Losses and Strategic Risks
Los Angeles Riots ended with Federal Investigations into Funding
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Education Secretary Announces Overhaul of Complaints System Amid Rising Parental Grievances
Massive Anti-Government Protests Erupt in Belgrade
Trump Ends Trade Talks with Canada Over Digital Services Tax
UK Government Softens Welfare Reform Plans Amid Labour Party Rebellion
Labour Faces Rebellion Over Disability Benefit Reforms Ahead of Key Vote
Jeff Bezos and Lauren Sánchez Host Lavish Wedding in Venice Amid Protests
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
North Korea to Open New Beach Resort to Boost Tourism Economy
UK Labour Party Faces Internal Tensions Over Welfare Reforms
Andrew Cuomo Hints at Potential November Comeback Amid Democratic Primary Results
Curtis Sliwa Champions His Vision for New York City Amid Rising Crime Concerns
Federal Reserve Proposes Changes to Capital Rule Affecting Major Banks
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Trump Escalates Criticism of Media Over Iran Strike Coverage
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
Big Four Accounting Firms Fined in Exam Cheating Scandal
NATO Members Agree to 5% Defense Spending Target by 2035
Australia's Star Casino Secures $195 Million Rescue Package Amid Challenges
UK to Enhance Nuclear Capabilities with Acquisition of F-35A Fighter Jets
×