LABOUR claimed yesterday that a proposed crackdown on tax dodgers would raise £5 billion a year to fund policies on the NHS and school breakfast clubs by the end of the next parliament.

Shadow chancellor Rachel Reeves said the plan to narrow the “tax gap” — the difference between the amount of money HM Revenue & Customs (HMRC) is owed and the amount it actually receives — was not “rocket science.”

The party also hopes to raise £2.6bn over the term of the next parliament by closing “loopholes” in the government’s plans to abolish non-dom exemptions. 

Labour said it would invest up to £555 million a year in raising the number of compliance officers at HMRC and that it had appointed an expert panel to advise on improving tax compliance and modernising HMRC. 

The panel will be chaired by shadow financial secretary James Murray, with other members including former HMRC permanent secretary Sir Edward Troup and Dame Margaret Hodge MP.

Speaking on BBC Radio 4’s Today programme yesterday, Ms Reeves insisted she was “confident” that her plans would raise the amount Labour had estimated, denying that the sums were “small change” compared with the potential cuts facing public services.

PCS general secretary Fran Heathcote, whose union has been campaigning for years for the tax gap to be closed, welcomed the investment in HMRC.

She warned that staff faced skyrocketing workload “coupled with the systemic low pay affecting vital grades working in the department.”

Ms Heathcote said: “We await further detail on the plans but hope this indicates that if Labour forms the next government, it will choose to take on the tax dodgers, rather than revert to austerity measures which have left public services falling apart and those that deliver them struggling to make ends meet.”

Positive Money head of policy and advocacy Simon Youel said:  “Whilst [it is] positive to see Labour is looking towards closing discrepancies between tax owed and tax collected, the £5bn this is expected to raise won’t be enough to fix crumbling public services.

“What we really need is a fairer tax system, where income from wealth is taxed at least the same as income from work.

“This will bring in the level of billions needed to revive the flatlining NHS, fix derelict schools and bring failing utilities operators under public ownership.”