HMRC data shows that the amount of tax lost in Britain through non-payment, avoidance and fraud has increased to £35bn. The tax gap – the difference between the Revenue’s expected income and actual receipts – is estimated to have increased by £2bn in the 2019/20 financial year compared to the 12 months before. HMRC says the figure represented a 5.3% shortfall of theoretical tax liabilities due, up from 5% in 2018/19. HMRC data for 2019/20 shows that it collected 95% of the tax it expected to receive, pulling in around £633.4bn. While failure to “take reasonable care” accounted for £6.7bn of the tax gap, avoidance accounted for £1.5bn – with error (£3.7bn) and the “hidden economy” (£3bn) also contributing to the shortfall. George Turner, the executive director of campaign group TaxWatch, has questioned HMRC’s report, suggesting it underplays the amount of tax lost to fraud. He said: “Our analysis, which puts the tax lost to fraud at least £15bn, demonstrates that fraud is a significant problem in the UK and a much larger problem than many previously understood”.
The Times