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Clampdown on tax dodgers is confirmed by Rachel Reeves in bid to fill spending black hole

Published on March 26, 2025 at 04:47 PM

A FRESH £1billion clampdown on tax dodgers has been announced by Rachel Reeves under efforts to raise cash.

The Chancellor vowed to go after the crooks by giving fresh powers to HMRC in the hope they will claw lost back money.

Woman speaking at a podium flanked by two men.
Ms Reeves today announced a tax avoidance crackdown

She told MPs: ”In the Budget, I delivered the most ambitious package of measures that we have ever seen to cut down on tax evasion raising £6.5billion per year by the end of the forecast.

“Today, I go further, continuing our investment in cutting-edge technology, investing in HMRC’s capacity to crack down on tax avoidance and setting out plans to increase the number of tax fraudsters charged each year by 20 per cent.

“These changes raise a further £1billion taking total revenue raised from reducing tax evasion under this government to £7.5billion.”

Almost £5.5billion was lost to tax evasion in 2022-23, 81 per cent of which was from small businesses.

Ms Reeves has previously pledged to tackle tax avoidance by closing legal loopholes that let people escape HMRC.

The Chancellor is scrambling to raise money to stay within her “non-negotiable” fiscal rules.

Official GDP forecasts were slashed in half in a gloomy outlook on the state of Britain’s finances.

The Office for Budget Responsibility downgraded its annual growth projections from 2 per cent to a paltry 1 per cent.

It means Ms Reeves will have less money coming into the Treasury to fund her spending plans.

Her “non-negotiable”; fiscal rules means she is unable to hike borrowing to fund day-to-day spending, and today she already delivered deep cuts to save cash.

It heightens the prospect the Chancellor will use the next autumn Budget to raise taxes to pay for her plans.

During the election she promised that returning Britain to strong growth would fund her spending ambitions – rather than tax rises and cuts.

But Labour have struggled to revive the nation’s flatlining economy, with the OBR today confirming UK PLC will continue to flag.

Critics blame Ms Reeves £40billion tax rises last year, as well as a raft of employer red tape they claim is hurting firms.

Bosses have also warned the £25billion National Insurance hike that kicks in next week will reduce their ability to hire new staff and invest.

There are fears Ms Reeves could use her next Budget to increase “stealth taxes” on workers despite pledging to end them last year.

Tax thresholds are currently frozen until 2028, meaning they will not rise with inflation every year as should be the norm.

Economists now warn she could keep the threshold freeze beyond 2028, meaning millions more will be dragged into paying higher rates.

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