Are HMRC's Tax Evasion Figures Wrong?

A recently published report has suggested that HMRC’s tax evasion deficit is inaccurate.

The report commissioned by the Public & Commercial Services union estimates that UK tax evasion stands at £80bn per year.

Further detail within the comprehensive report highlights that the total tax deficit to the UK government is currently at an estimated £119bn. The tax deficit is accounted for by:

• Tax avoidance (through legal loopholes, i.e. through arranging tax affairs to minimise tax, often in offshore jurisdictions or through tax avoidance schemes which has seen recent press attention)
• Tax evasion (withholding tax illegally, i.e. deliberately failing to declare income)
• Tax debt (owed to the UK government)

Forecasts included in the report also suggest that the deficit solely for tax evasion could reach £100bn by 2018-19.

The report recommends that the government should seek to reform its tax laws to incorporate avoidance strategies, and that more investment into HMRC is needed to ensure that everyone pays the right amount of tax to create a level playing field.

Despite HMRC’s continued strategy to clampdown on tax avoidance and evasion in the UK, its workforce has continued to fall in recent years following cutbacks.

There is no doubt that HMRC will continue to develop strategies to target those it suspects of owing tax, for example, the targeted release of Accelerated Payment Notices (APNs).

If you would like to make a voluntary disclosure to HMRC to clarify your tax position you should do so with the benefit of professional expertise. Our team of tax investigations and disclosures professionals are experienced in guiding individuals through disclosure and investigations.

To talk to us in complete confidence you can call 0113 387 5670 or alternatively fill out an Enquiry Form and we’ll get back to you.