I think the issue with people avoiding taxes and evading them would be greatly take cared of if the HMRC is increased in size. A lot of the problems are because some people think that the loopholes are easy to take advantage of. I think that if the HMRC were to be more present, then people wouldn't take such measures.
Yes, I believe that tax avoidance and tax evasion can be decreased if the HMRC is increased in size, because there would be more oversight. With more oversight, the HMRC can spend more time on enforcement efforts, such as finding people who are evading taxes and prosecuting them. With more resources, the HMRC can spend more of those resources on enforcement.
As with any discussion involving justice, there are two ways typically to increase those brought to justice, and/or a decrease in the criminal activity. The first way would be an increase in legislation. Some feel that making more laws and penalties will decrease the conduct and increase ways to prosecute offendors. The second way is by increasing the efforts or size of the enforcement agency. Increasing the HMRC will reduce the amount of tax avoidance, but at what cost?
No matter how large Britain's HMRC is increased, there will still be tax evaders and tax cheaters who try to get around the law. Tax avoidance may be decreased, but at what cost? Is the extra tax revenue worth increasing the size of government? Won't taxpayers have to pay for the added workers just to collect more taxes?
I don't necessarily think that the total numbers of people committing these tax crimes will decrease significantly, but I do think it's possible for the HMRC to catch more people in the act. I think it's the kind of arrogant, selfish crime where people will commit the crime regardless of a watchdog.