Balls calls for clamp down on tax avoidance

Shadow Chancellor Ed Balls has argued that postponing the planned January increase could be paid for by clamping down on tax avoidance schemes used by employment agencies.

In a blog for PoliticsHome, Mr Balls wrote:

Where should the Government get the money to pay for this tax cut? I suggest they pay for this move by clamping down on tax avoidance.

For example, there is a growing problem with some employment agencies forcing workers to become employees of an umbrella company.

They then falsely inflate the worker's travel and food expense claims, reducing tax and national insurance, and pocket the avoided tax as profits.

HM Revenue and Customs has forecast that these schemes cost the exchequer £650 million a year. Recent estimates have now put it as high as £1 billion a year.

Even if only a proportion of that money was recouped it could pay for the fuel duty rise to be put off until next spring.

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Osborne 'set to freeze' fuel duty

Conservative rebels said they expect the Chancellor to freeze a planned 3p rise in fuel duty for another three to six months. The Government has defeated a Labour motion to postpone the duty rise by majority of 48.