Commons Sense

House of Commons · Ministers' Questions

Tax Evasion: High Street Businesses

Tuesday 1 July 2025 · 2 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 0 Partly answered 2 Not answered 0

Key points

  • Ministerial Questions addressed tax evasion through phoenixing on high streets
  • Joe Powell questioned the Minister about tackling businesses that evade taxes by cycling through limited companies
  • Andrew George inquired about steps to close tax system loopholes

Topics (select to filter)

Questions & Answers

Q1 Joe Powell Lab Kensington and Bayswater
Taxation
Context

A common issue on high streets is phoenixing, where businesses cycle through multiple limited companies to avoid paying corporation tax, VAT or business rates. This practice is alleged in Harry Potter-themed gift shops across London.

Question

As the Minister is no doubt aware, an increasingly common issue on our high streets is phoenixing. That is where a shop unit continues to trade while cycling through multiple limited companies every few months, none of which pays corporation tax, VAT or business rates. Can the Minister encourage officials at His Majesty’s Revenue and Customs to walk along Whitehall, just a few hundred metres from this Chamber, and take a look at whether the series of Harry Potter-themed gift shops across London—which have been accused by “London Centric” of doing exactly that—are playing by the rules? Will they ensure that tax enforcement supports legitimate small businesses on our high streets?

Answer from James Murray (Exchequer Secretary to the Treasury)

My hon. Friend is a powerful campaigner and advocate for tackling those who do not play by the rules. While I am unable to comment on individual taxpayer affairs because of my position, I very much recognise the issue. We are determined to tackle this problem, and HMRC is working across Government on enforcement action, including work with Companies House and the Insolvency Service to tackle phoenixism.

Partly answered

Not addressed: The Minister did not directly address the request to investigate specific Harry Potter-themed gift shops or ensure support for legitimate small businesses.

How: Unable To Comment On Individual Taxpayer Affairs

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Q2 Andrew George Lib Dem St Ives
Taxation
Context

The previous government announced a package of measures to reduce the tax gap, but there is concern that loopholes still exist.

Question

What steps she plans to take to close loopholes in the tax system.

Answer from James Murray (Exchequer Secretary to the Treasury)

The year before we came to power, the tax gap stood at £47 billion. That is unacceptable, which is why we announced the most ambitious-ever package of tax gap measures in the Budget, and went even further in the spring statement. We are now forecast to raise £7.5 billion from the tax gap in 2029-30, including by recruiting 5,500 more compliance officers, investing in better technology and closing loopholes. We will bring forward further measures to close the tax gap in the autumn Budget.

Partly answered

Not addressed: The Minister did not specify what specific steps would be taken beyond general commitments to close loopholes.

How: Announced A Package Of Measures But No Specifics On Closing Loopholes

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