Stemming the Flood? - Assessing the UK Government's policy on tax avoidance since Budget 2008

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Stemming the Flood? - Assessing the UK Government's policy on tax avoidance since Budget 2008

Executive summary

The TUC published its report entitled The Missing Billions that catalogued the £25bn per annum loss to the UK Exchequer as a result of tax avoidance in February 2008. Since then the economic environment has changed beyond recognition and the UK Government has had three opportunities to announce significant tax reforms.

This paper does four things.

  • It assesses the reforms the UK Government has proposed in that period to tackle tax avoidance. It estimates that measures undertaken by the Government since Budget 2008 have saved the taxpayer £1bn.
  • It notes some setbacks in achieving that goal that have occurred during the same period.
  • It sets out a revised programme for tax reform, based on that in The Missing Billions but taking intervening events into account.
  • It makes clear that a policy of cutting staff at HM Revenue & Customs (HMRC) is counter-productive when there is a shortage of skilled people available to that agency to tackle tax avoidance, and every one of their staff who does so collects many times their employment costs in tax from those seeking to avoid paying their obligations to society.

As was the case when The Missing Billions was published, the case for reform is pressing. When the alternative is now seen to be cuts in public services and resulting hardship and unemployment for millions in the UK the case has moved on from being an economic one to being a matter of social and moral necessity.

The report will be published and distributed widely to opinion formers and policy makers. The TUC will discuss the findings with the Treasury and urge action to address the still significant problem of tax avoidance.

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