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Chancellor to target tax dodgers and appoint Covid Corruption Commissioner

ended 23. September 2024

Rachel Reeves is today expected to confirm the appointment of a Covid Corruption Commissioner to claw back over £600m of disputed contracts the Tories had agreed to waive.

The Chancellor will also apparently unveil new measures to target tax dodgers, who have collectively racked up nearly £40bn owed to HMRC. To achieve this, she plans to recruit 5k additional revenue officers during this administration.

Free news agency, Newspage, asked experts for their thoughts. While this may be noble in theory, but how will it play out in practice — and is it the right area for the Government to be focusing on?

One, Gabriel McKeown, Head of Macroeconomics at Sad Rabbit Investments, said it could be a costly mistake:

"In trying to balance the books of the past, rear-view Reeves’ retroactive approach to finances risks closing the chapter on future prosperity. While the Chancellor hunts for lost millions, billions could slip through the UK’s fingers. Of course, a crusade against alleged Covid profiteers may play well politically, but the economic impact remains uncertain. It is important to remember the pandemic era, with contracts hastily drawn up during a national emergency, making the line between misconduct and incompetence harder to prove. By stepping into this legal quagmire, the cost of potential litigation could easily outweigh recoveries. The determination to recoup misspent funds is admirable, yet there is a risk of neglecting the need for policies to help the current economy by fixating on past. In the grand scheme of Britain's economic challenges, pursuing pandemic profiteers might be a costly distraction from the more crucial task of charting a course for future prosperity."
 

2 responses from the Newspage community

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Editor
Gabriel McKeown
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
In trying to balance the books of the past, rear-view Reeves’ retroactive approach to finances risks closing the chapter on future prosperity. While the Chancellor hunts for lost millions, billions could slip through the UK’s fingers. Of course, a crusade against alleged Covid profiteers may play well politically, but the economic impact remains uncertain. It is important to remember the pandemic era, with contracts hastily drawn up during a national emergency, making the line between misconduct and incompetence harder to prove. By stepping into this legal quagmire, the cost of potential litigation could easily outweigh recoveries. The determination to recoup misspent funds is admirable, yet there is a risk of neglecting the need for policies to help the current economy by fixating on past. In the grand scheme of Britain's economic challenges, pursuing pandemic profiteers might be a costly distraction from the more crucial task of charting a course for future prosperity.
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John Castle
Tax & Financial Planning Consultant at Tax Planning Solutions
In theory, the appointment of a new Covid Corruption Minister with the aim of recouping up to £600m of disputed contracts sounds like a noble idea. However, in practice, even if all the money from these disputed contracts were successfully recovered, that would represent only 0.15% of the £400bn that was spent on propping up jobs and businesses. Political point scoring aside, it begs the question, where and when do you draw the line on what’s happened in the past?
Moving forward, if the announced reform, modernisation and investment into HMRC is well executed, this can only be a good thing. We all have a collective responsibility to ensure we pay our dues and contribute towards the cost of running the country.
What we don’t know, is what effect Labour’s new measures will have on those wealthy individuals who don’t agree with Labour’s stance that ‘those with the broadest shoulders’ should bear the greatest burden. This could have unintended consequences that are to the detriment of all.