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HMRC loses £16 billion thanks to tax fraud

A sum of £16 billion was lost due to tax fraud in 2016, according to estimated figures by law firm Pinsent Masons.

The firm claimed that, in spite of HMRC managing to collect a further £5 billion in revenue from its Fraud Investigation Service (FIS), the 11-figure loss comprises close to 50% of HMRC’s tax gap, a figure that stands at £34 billion at present.

Of the £56 billion that was collected within the last 12 months, £2.7 billion came from HMRC civil investigation and £2.2 billion from criminal investigations. The FIS, which leads the collection, was formed in July of 2015 and features specialist criminal justice and tax experts tasked with handling serious investigations.

Civil investigations are carried out through the Contractual Disclosure Facility, aimed at encouraged taxpayer cooperation. Following the CDF and civil procedures, a taxpayer signs a contractual agreement with HMRC, which means that they can avoid being subject to criminal investigation, provided they meet their side of the bargain and disclose any details they have to the relevant authorities.

Pinsent Masons tax director Paul Noble said:

“The new Fraud Investigation Service has been successful in collecting additional revenue but tax fraud remains very damaging to the Treasury.”

HMRC will not be happy with losing revenue from tax fraud, and will likely respond by making life harder for businesses when it comes to filing tax returns. It is always wise to leave those returns in the capable hands of an accountant. Wirral firms that do this can be sure that somebody is keeping a close eye on any new requirements.

Posted by Peter
February 16, 2017

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