Latest figures show the UK is missing out on billions annually in lost tax revenue with amount rising for the second year in a row.
Statistics from HMRC estimate a shortfall of £35 billion in 2018/19 between the tax that should have been paid and the amount actually collected, up £2billion on the previous year and an increase of 17% since 2015/16.
Robert Palmer, Executive Director of Tax Justice UK, said: “The missing billions that HMRC claims make up the UK’s tax gap is equivalent to the entire budget for housing and the environment. While we’ll never collect all of this, more needs to be done.
“But there is a strong argument that the £35 billion gap is an understatement. Some argue that the actual figure could be as high as £120 billion as HMRC’s calculations miss out whole parts of the problem. To track down these missing billions HMRC needs to be properly resourced. The government must also close tax loopholes and take action against tax professionals who enable tax dodging.”
Analysis of tax returns recently published by Dr Arun Advani and the Social Market Foundation found HMRC had significantly reduced the number of spot checks it carries out. Dr Advani’s research also found that targeted spot checks are effective at finding instances of underreporting and influence taxpayer behaviour in subsequent years.