I had no idea the figures were so stark

[lexin]

Yes, yet another political entry.

From "Tax is the best form of defence" a circular produced by an old friend of mine, Anna Owens, and which is here.

"Currently the UK debt is £175 billion, an increase in £45bn from 2008. This debt could be nearly eradicated if HMRC (what was called the Inland Revenue) were given the resources to collect the £100 bn tax which is lost to the exchequer each year through tax avoidance, tax evasion and failure to collect."

Remember, she's not talking about introducing any new taxes. None. Just actually having more civil servants to get out there and do the job of identifying and collecting taxes that are already owed. And tax debt can go back six years. The government could eradicate the UK debt without cutting services, by spending more money where it's needed.

Comments

[watervole.livejournal.com]

She makes a very good point.

[pinkdormouse.livejournal.com]

A very good point indeed.

[liadnan]

UK net public sector debt is actually of the order of £740bn, not including the financial interventions (870bn incl). The £175bn figure referred to is presumably the projected PBR for 2009/10 (actually £178bn). ( http://www.statistics.gov.uk/cci/nugget.asp?id=206 )

As for the figure of £100bn lost each year "through tax avoidance, tax evasion and failure to collect" I view that figure with some scepticism. In particular, if tax has in fact been successfully avoided then it's not owed.

[lexin.livejournal.com]

The figure for evaded, avoided and uncollected tax has been estimated to be nearer £130bn; this figure comes from the work of a guy called Richard Murphy. He references it here: http://www.taxresearch.org.uk/Blog/category/tax-gap/

Murphy claims that £70bn is lost through evasion (i.e. illegal non-payment), £25bn is lost through avoidance (legal non-payment) and presumably the rest us uncollected.

Official estimates put the figure at somewhere around £40bn. From here: http://www.hmrc.gov.uk/pbr2009/protect-tax-revenue-5450.pdf (Which is a fascinating document if you've an interest in these things.)

From that, I reckon PCS's estimate of £100bn is probably not far from the mark. Certainly in the dear dead days when I did a visiting job checking National Insurance records, most companies were (if you'll excuse the phrase) "doin' it rong". In 12 years, and visiting something like 80 companies a year, I found 1 company (that's one, not a mistype) whose National Insurance records were correctly calculated and who hand paid the right amount.

[the-magician.livejournal.com]

Tax avoidance, as liadnan points out is legal, and means that there is *no* tax liability on that. So that's a ficticious £25bn as it is money that is not owed.

Usually there are things that the government wants to encourage, like Research & Development, and if a company can show that a certain amount of the income is spent on appropriate R&D, they can claim a tax break on that amount. So that's "tax avoided" and so nothing that needs to be paid. There's a reason for most of those "avoidances" and in general they are seen as a benefit to either the government or the country.

However selling off tax offices to a company that is registered for tax in a foreign country, and which then leases the offices back to the government and keeps the profits out of the country, is just a stupid move (see many issues of Private Eye)

[lexin.livejournal.com]

and means that there is *no* tax liability on that.

Now, from my own experience as an investigator, I'd disagree. I do recall spending time and effort on such ridiculous National Insurance avoidance schemes (which resulted in changes in the law) as paying people in antique clocks and gold coins. These clearly were not in the spirit of the law.

[mandragora1.livejournal.com]

Unfortunately I'm all too well aware how little resources HMRC have to collect evaded and unpaid taxes - the CTU (Criminal Taxes Unit) is severely undermanned and that's just the start.