Labour Pledges to Clampdown on Tax Dodging to Pay for NHS Plans

Labour Vows to Crack Down on Tax Evasion to Fund Healthcare Initiatives

April 9, 2024 TruthUSA

The party is aiming to close inheritance tax loopholes for UK residents with non-domicile status.

Labour has promised to support its NHS policies and free school breakfasts by cracking down on tax evasion.

The party intends to generate an extra £5 billion annually by addressing tax avoidance by the end of the Parliament. These actions will provide funding for healthcare services, reduce NHS waiting times, and finance free breakfasts for primary school children.

“I will combat tax evasion to secure more NHS appointments and dental services, as well as free breakfast clubs for all primary schools,” stated shadow chancellor Rachel Reeves.

Ms. Reeves disclosed that she had identified “funding streams” to uphold Labour’s commitments to the NHS and schools. The funds recovered from “taking on tax dodgers” will support more hospital appointments, new scanners, and additional dental services, according to the shadow chancellor.

Labour has also committed to raising £2.6 billion over the coming Parliament, including an initial £1 billion, by closing the loopholes in Prime Minister Rishi Sunak’s non-domicile plan.

UK residents with non-domicile status may not be required to pay UK taxes on foreign income. Last October, Labour leader Sir Keir Starmer announced plans to eliminate the tax status for UK resident non-domiciled individuals.

Loopholes

“It took years for Rishi Sunak to reverse his stance and eliminate the non-dom status. However, hidden in his plan’s details is a £400 million annual loophole that will benefit some of Britain’s wealthiest individuals,” Labour stated on the social media platform X.

The current regulations for non-UK domiciled individuals will cease in April 2025. Tax benefits will be removed for residents who have resided in the UK for more than four years. Additionally, the Treasury aims to transition inheritance tax to a residence-based framework.

Nevertheless, foreign assets placed in an overseas trust before the April 2025 deadline will be permanently exempt from inheritance tax.

Shadow financial secretary to the Treasury, James Murray, emphasized the UK’s historically high tax burden and significant tax gap. Closing the non-dom plan loopholes and addressing tax avoidance will release funds for investment in HMRC, he noted.

Labour criticized the government for not doing enough to close the £36 billion tax gap, representing the disparity between owed taxes and collected revenue.

The opposition’s strategies to address the gap include increasing the number of tax compliance officers by up to 5,000 and digitizing the tax office. Labour also aims to broaden the range of tax schemes reported to HMRC under the disclosure of tax avoidance schemes regime.

These efforts, along with additional measures, are intended to generate up to £855 million in supplementary funding for HMRC.

“Labour’s Plan to Close the Tax Gap will persistently pursue owed funds, ensuring proper tax payments and directly addressing tax avoidance and evasion,” the party stated.

In response, the government designated funding last year for an additional 700 debt officers, both internally and through external collection agencies. Mr. Hunt claimed that government initiatives are projected to raise over £4.5 billion in tax revenue by 2028-29.

Labour contended that its strategies will yield positive outcomes for the NHS, funding two million more NHS operations, scans, and appointments annually during evenings and weekends. The funding will also accommodate 700,000 urgent dental appointments and bolster medical staff recruitment.

“Over the Parliament’s duration, the proposals announced will generate nearly twice as much as our NHS and breakfast club expenditure plans,” the party asserted.

Moreover, it assured that every policy outlined in its manifesto will be fully financed each year.

PA Media contributed to this report.

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