Coatbridge, Chryston and Bellshill MP Phil Boswell has demanded the Treasury explains how it plans to tackle tax avoidance schemes.
HMRC has reported that tax avoidance, such as the ‘Mayfair tax loophole’, cost the UK economy £4.1 billion in 2012/2013, nearly four times the cost of benefit fraud during the same fiscal year.
Other organisations, such as the Public and Commercial Services Union, have estimated that avoidance schemes cost the UK economy £19.1 billion per year.
In the House of Commons Mr Boswell questioned David Gauke, the Financial Secretary to the Treasury.
He said: “The Chancellor has made some noise about closing tax avoidance schemes exploited by private equity and hedge fund managers, specifically the ‘Mayfair’ tax loophole.
“Can he confirm that he intends to close these loopholes?”
Mr Gauke responded: “We achieved a huge amount in the previous Parliament on tax loopholes.
“In the Budget, the Chancellor set out plans for additional resources for Her Majesty’s Revenue and Customs to raise even more in dealing with tax avoidance and tax evasion.
“The particular example that you mention relates to the long-standing treatment of the capital gains tax applying to private equity - something that has existed for many years and applied in most other countries.
“The Budget contained a number of measures that were designed to close loopholes for the private equity and hedge fund industries.”
Afterwards Mr Boswell was frustrated about the vagueness of the answer he received.
He said: “I am disappointed that the Financial Secretary to the Treasury avoided giving a real answer to how tax avoidance, including the ‘Mayfair tax loophole’, will be tackled.
“Tax avoidance costs the economy nearly four times as much as benefit fraud, yet this government blames the most vulnerable in society for the economic problems caused by a lack of regulation and enforcement in the financial industry.”