Tax fraud is costing us £16bn a year – the equivalent of the entire Department for Business’s budget

There’s a huge gap in the nation’s finances

The Department for Business, Innovation and Skills has been forced to slash its budget in recent years – with more cuts to come – but would it have had to do so if tax fraud wasn’t so prevalent?

It seems the government is losing the entire cost of the Department for Business’s budget just in tax fraud – amounting to £16bn a year.

Rebecca Long-Bailey, shadow Treasury minister, said: “We all knew that George Osborne was all talk when it comes to tackling tax avoidance, but this report is damning.”

The £16bn the National Audit Office claim is going uncollected a year from tax fraud is nearly the equivalent to the budget for the Department of Business, she said.

“And it is enough money to reverse many of the welfare cuts that he has planned for working families.

“This is why the Chancellor needs to think again with his cuts to HMRC because closing 153 tax offices will only further tie the hands of HMRC – it’s a false economy that costs us all more in lost taxes than we save.

“The simple truth is that it’s the businesses and taxpayers who pay their taxes who have to carry the burden for those who shirk their responsibilities.”

Sir Amyas Morse, the head of the National Audit Office, said: “HMRC loses £16 billion a year due to tax fraud, but reducing these losses is not straightforward.

“HMRC has met its targets to raise more tax revenue in the short-term.

“It now needs to consider whether its overall strategy is designed to achieve the best long-term outcomes.

“We will be evaluating HMRC’s performance in tackling different types of tax fraud in more depth.

“As we do so, we will be looking for further improvements in the way HMRC uses data and analysis to understand the effect of its actions in both the long and short-term.”

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Readers' comments (2)

  • Anonymous

    It is doubtful if the Dept for Business achieves anything useful. What do all those clerks do in that huge office block on Victoria Street? My business has not received any help at all from this bureuacratic waste of money. Abolish it.

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  • Rebecca Long-Bailey, shadow Treasury minister, said: “We all knew that George Osborne was all talk when it comes to tackling tax avoidance, but this report is damning.”

    It's time the shadow Treasury minister learned the difference between tax fraud (illegal) and tax avoidance (legal).

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