The amount of taxes lost in Britain due to non-payment, avoidance and fraud has risen to Â£ 35 billion, according to official figures.
HM Revenue and Customs said the tax gap – the difference between expected revenue from the Treasury and actual revenue – would have increased by around Â£ 2 billion in fiscal year 2019-20 compared to the period of the previous year.
He said that figure represented a shortfall of 5.3% of notional tax obligations owed, up from 5% in 2018-19.
Campaigners said the amount of taxes lost to the fraud, based on HMRC figures, was at least Â£ 15.2 billion, but billions more were likely to have been transferred from the Kingdom United to tax havens by multinational companies.
The annual snapshot of tax underpayment comes as public finances are under the most severe pressure since World War II, as the emergency response to the coronavirus pandemic and the economic crisis pushes public borrowing to low levels. record levels.
The government’s budget deficit, the gap between spending and income, reached Â£ 298 billion in the fiscal year ended at the end of March 2021, the largest post-war deficit and almost double the deficit due to the 2008 financial crisis.
Boris Johnson’s government has announced Â£ 36bn a year in tax hike measures over the past three months in response to mounting pressure on public finances, in a development economists say will drive the levies UK taxes at the highest levels as a percentage of GDP in 70 years.
However, the government has been criticized for increasing the national insurance tax on workers, rather than targeting the wealthy. George Turner, executive director of the TaxWatch campaign group, said HMRC’s presentation of the tax gap significantly underestimated the amount of tax lost to tax evasion. “Our analysis, which puts the taxes lost due to fraud at at least Â£ 15bn, shows that fraud is a significant problem in the UK and a much bigger problem than many previously thought,” said he declared.
The latest analysis available for 2019-2020, just before the pandemic hit, showed HMRC was collecting 95% of the tax it expected to receive. Officials said failure to ‘exercise reasonable caution’ was a significant part of the Â£ 6.7bn tax gap, with avoidance amounting to Â£ 1.5bn.
An estimated Â£ 3.7bn of the gap is due to errors and Â£ 3bn to the “hidden economy” which includes “ghosts” who keep their income a secret from tax officials and tax officials. “moonlighters” who declare only part of their income.
The HMRC said the tax gap for high net worth individuals fell from Â£ 1.6bn to Â£ 1.5bn in 2019-20. The shortfall for inheritance tax has fallen from around Â£ 425million to Â£ 350million.
HMRC said it saw an increase in total income paid year over year.
Taxpayers paid over Â£ 633.4 billion in 2019-2020, an increase of over Â£ 100 billion four years earlier in 2015-16.
Jim Harra, Managing Director of HMRC, said: âIt is encouraging to see such a large proportion of businesses and individuals meeting their tax obligations.
“We want to help everyone get tax right, which will help fund our vital public services like the NHS and emergency services.”
Any impact on the tax gap from the coronavirus lockdowns and the economic downturn is expected to be visible for the first time in the 2020-21 figures, which will be released next year, HMRC said.