Budget 2024: Tax evasion and avoidance crackdown to raise £6.5bn as HMRC gets 'slick' overhaul

Rachel Reeves will raise £6.5 billion extra a year to spend on public services by beefing up HMRC to crack down on tax evasion, avoidance and other unpaid taxes.

And around 9 million small business owners, including brickies, plumbers and white van men, are set to benefit from a slicker, more efficient and customer-friendly UK tax office. HMRC’s services will get a £16 million revamp, improving the office’s app to let people make voluntary self-assessment payments in instalments.

Last year, HMRC answered just two-thirds of phone calls where customers wanted to speak to an advisor. But the Treasury believes Wednesday’s announcements will be enough to boost the answer rate to 85%, meeting their performance target and meaning thousands of small businesses waste less time on the phone.

Ms Reeves will also confirm recruitment of an additional 5000 HMRC compliance staff - with 200 set to start training next month - and funding for 1,800 debt management staff.

A Treasury source said: “For far too long working people have had to spend hours on the phone, going round in circles trying to get a straightforward answer on their tax affairs. We’re building a more modern, more efficient UK tax office so people don’t have to waste their valuable time.”

READ MORE:

It was reported that Ms Reeves plans to increase employers National Insurance contributions by two percentage points to help plug the £22 billion black hole left by the Tories.

She’s also expected to reduce the threshold at which employers start making national insurance contributions. The two changes are expected to raise a combined £20 billion a year - and would only apply to private sector employers, with government departments having the increase reimbursed by the Treasury to avoid having to make spending cuts to compensate.

had pledged in its manifesto to not hike taxes on what it described as "working people," explicitly ruling out increases to VAT, national insurance, and income tax

denied he’d misled the public about tax rises in the manifesto.

Speaking at a press conference in Samoa, the Prime Minister said: "We were clear… in the manifesto and in the campaign that we wouldn't be increasing taxes on working people, and spelt out what we meant by that in terms of income tax, in terms of NICs and in terms of VAT and we intend to keep the promises that we made in our manifesto."

READ MORE:

In Wednesday’s , Ms Reeves is expected to announce a raft of measures to close Britain’s ‘tax gap’ - the difference between what’s owed and what’s actually paid - over the next five years.

The extra money raised will be used to fund the and public services for working people.

And she’ll announce plans to end ‘phoenixism’ - where business owners close down companies that can’t pay their tax debts, only to re-open them under a different name.

The Treasury believes the practice costs the country half a billion a year in lost revenue.

The government will ask HMRC to begin work with Companies House and the Insolvency Service to tackle this issue head on over the next five years.