Query over tax gap

Unions have raised questions as to the size of the UK tax gap — the money lost through tax evasion, avoidance and not being collected.

The tax gap in 2009-10 was estimated to be £35 billion, HM Revenue and Customs (HMRC) has said. This was £4 billion less than the previous year, the main reason for the drop was the cut in VAT from 17.5% to 15% from December 2008 to the end of 2009.

In total, 7.9% of all tax went uncollected in 2009-10, compared with 8.1% the previous year.

Businesses failed to hand over an estimated £4.8bn in corporation tax, according to HMRC.

However, the PCS civil service union says that the real figure is more than three times the HMRC’s figure and is about £120 billion.

PCS general secretary Mark Serwotka said: “By any measure, £35 billion is a lot of money and it ought to be chased. But we estimate the real figure is more than three times that, and cuts in HMRC are leaving the department unable to cope.

“Instead of cutting jobs and offices, ministers should invest to rigorously pursue the tens of billions of pounds in tax lost through the use of tax havens and evasion and avoidance tactics by big corporations and the very wealthy."

www.hmrc.gov.uk/stats/measuring-tax-gaps.htm

www.pcs.org.uk/en/news_and_events/news_centre/index.cfm/id/10C1459A-5645-4C64-ACF753C2C9D8500F