Miliband pledges 'root and branch' HMRC review

There will be a review of HM Revenue and Customs' approach to tax evasion and avoidance if Labour comes to power, Ed Miliband has said.

Addressing the Welsh Labour conference, he said the UK tax authority needed to "do a much better job".

Mr Miliband also accused the coalition of "shrugging its shoulders" on tax avoidance - which he claimed had left a £34bn hole in the UK's finances.

The Conservatives said HMRC's culture and practices went wrong under Labour.

Close loopholes

Mr Miliband said: "In Britain today we risk having one rule for the rich and powerful and another for everybody else."

He claimed the current government had "turned a blind eye to tax avoidance because it thinks that so long as a few at the top do well the country succeeds".

The Labour leader said the proposed review would report back by July with recommendations for reforming the tax authority.

HMRC's culture and practices when it came to dealing with "aggressive tax avoidance" would be scrutinised, he said.

He also pledged to bring in fresh penalties for those who avoid tax, and to close loopholes in the law - which he said were used by hedge funds to avoid stamp duty and by large companies which move profits out of the UK to avoid corporation tax.

'Age of irresponsibility'

But a Conservative Party spokesman said the culture at HMRC to which he referred "went wrong under Labour - when top bankers paid lower tax rates than their cleaners, foreigners didn't pay capital gains tax, and the richest people routinely avoided paying stamp duty".

The spokesman stressed that PM David Cameron had prioritised prosecution of tax dodgers, taxation of multinational companies, and closing loopholes.

He also said the question for Mr Miliband was "whether this inquiry would include Labour's record during the age of irresponsibility that he was at the heart of".

Tax has been the focus of several recent clashes between Labour and the Conservatives.

The prime minister was asked earlier this week to explain the "revolving door between Tory Party HQ and the Swiss branch of HSBC" - after it was alleged that HSBC's Swiss private bank may have helped wealthy clients avoid or evade tax.

In response David Cameron said it was the previous Labour government which had been "the friend of the tax dodger".