Reeves says £5bn tax crackdown would help fund NHS and schools

Rachel Reeves has said an incoming Labour government would launch a £5bn crackdown on tax avoiders to close a gap in its spending plans exposed by Jeremy Hunt's scrapping of the non-dom regime to finance tax cuts.

- Phillip Inman

Warning households and businesses that Labour was prepared to adopt tough measures to tackle tax fraud and non-compliance, the shadow chancellor said the funding would be used to pay for free school breakfast clubs and additional NHS appointments.

Speaking before a visit to a hospital in Manchester with the shadow health secretary, Wes Streeting, Reeves will accuse Hunt, the chancellor, of hampering HMRC's ability to collect tax following budget cuts that will limit the number of compliance officers and tax investigators.

Labour's plan would reduce the "tax gap" - the difference between the amount of money HMRC is owed and the amount it receives - back to previous levels after it increased by more than £5bn over the last year.

Reeves would also raise £2.6bn over the next parliament by closing loopholes in the government's plans to abolish exemptions for non-doms -people who are not domiciled in the UK for tax purposes.