Tag Archives: tax gap

Tax Dodging Soars Under Tories To Seven Times Entire Bill For Unemployment Benefit

tax-gapDespite Tory claims that they would cut down on tax evasion and avoidance, the amount of tax dodged each year soared by £3 billion to £35 billion in the first two years of this Government.

The tax gap means the difference between the amount of tax HMRC believe is legally due, and the amount lost to fraud, evasion, error, avoidance or simply going unpaid.  The Tax Office last week published the latest estimates for the year 2011/12, although they themselves admit their figures are far from perfect.  Some research has indicated the true figure is around three and a half times higher than Treasury estimates at around £120 billion a year.

These figures do not include the many and varied ways global corporations choose to avoid tax, such as the widely publicised failure of Google, Amazon and Starbucks to pay for the services their businesses depend on.

Even taking the HMRC figures at face value the sums of money involved are staggering.  £35 billion was evaded, avoided, stolen or went unpaid in 2011/12 – £3 billion more than in 2009/10 – the year before the current Government weren’t elected.

The latest statistics show that £5.1 billion was unpaid due to tax evasion, which means illegal tax dodging and a further £4 billion through the slippery forms tax avoidance which HMRC consider is just about legal tax dodging.  To place this figure in context, the amount lost through illegal evasion alone is enough to pay for the entire budget for the mainstream unemployment benefit Jobseeker’s Allowance, and still have change.  The total amount of missing tax is around seven times higher than the entire budget for the dole.  In another stark comparison, the amount estimated to be lost to fraud across the entire social security system was just £1.2 billion in 2012/13.

Most workers on PAYE don’t even get a change to dodge their tax.  For the rich it is a very different story and it is theft every bit as much as a disabled person caught playing golf or a single mum who doesn’t tell the Jobcentre she has a partner straight away.  The thieving rich expect a fire brigade to turn up if their mansion burns down after all, and a police force to help them protect their wealth.  But many of them don’t want to pay their rightful share of the profit they make from our work to pay for them.

To read HMRC’s guess at how much the rich are fleecing us download Measuring Tax Gaps 2013 (PDF)

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