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Tax Avoidance

Volume 511: debated on Tuesday 8 June 2010

Tackling tax avoidance is essential, and we will make every effort to do so. We are committed to preventing avoidance through deterrence, and by ensuring that we have a robust legislative framework. We detect avoidance early using the disclosure of tax avoidance schemes rules and other information. We tackle avoidance quickly where we find it by strengthening legislation or through the operational work of Her Majesty’s Revenue and Customs.

Recent research has shown that up to £120 billion a year is lost to tax avoidance. Will the Minister ensure that he looks at the way in which HMRC works, and does better so that people will not have to pay higher taxes and receive poorer services as a consequence?

I am grateful to the hon. Gentleman for his question. We would disagree with the number, as the tax gap estimate produced by HMRC is £40 billion. None the less, that is a significant sum, and it is absolutely right that people pay the tax that is due, and HMRC will continue to pursue matters to reduce tax avoidance.

Is not the general view correct, and the estimated tax gap of £40 billion a significant underestimate? Will the Minister explain how cuts to HMRC staffing and capacity are to be aligned with attempts to close the tax gap?

Staff in HMRC have been reduced for many years, from 97,000 to 69,000. Any Government will want to ensure that HMRC’s resources are deployed as effectively and efficiently as possible, and we will certainly seek to do so.