Tax avoidance 'costs £25bn'

HMRC lost out on £25bn last year due to tax avoidance techniques used by wealthy individuals and businesses, according to the TUC.

The trade union body's figures suggest individuals were able to avoid paying £13bn totally legally, while companies avoided £12bn.

Often corporations or individuals will register in tax havens to lessen their exposure to the UK tax laws.

The TUC is calling for a clampdown on such techniques, arguing that most companies and people who would threaten to leave the UK would not carry that out.

"There may be threats from people saying they're going to leave because they want tax cuts," said Richard Murray, author of the report.

"But the truth is that they don't appear to be real threats and the evidence is that those who are best off in society are getting the best deal from our tax system."

Critics of the report pointed out there may be good reasons for companies paying less than the usual 30% tax rate, such as concessions given to those investing in research and development.