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Tax fraud costing £16bn a year

Tax fraud losses total £16 billion per year, approximately 50 per cent of an estimated tax gap, says a report from the National Audit Office.

HMRC reported in

2014/15 that it had gained £26.6 billion in additional revenue earned from compliance work, which included work undertaken to combat tax fraud, as well as dealings with further tax gap issues, including tax avoidance.

The tax body has more details on work carried out on organised criminal activity than it does on tax evasion. It has been estimated by the NAO that between 30 per cent and 40 per cent of compliance yield comes from HMRC’s attempts to combat tax fraud, although the estimate is based on only partial evidence.

HMRC says that two groups – criminal organisations and small firms – account for 17 out of the 21 major tax fraud risks. Eight of these are related to crime, whilst the remaining nine are linked to small to medium-sized businesses.

Amyas Morse, who heads the National Audit Office, said:

“HMRC loses £16bn 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.”

Businesses in the UK are always a potential target for HMRC and their latest schemes to investigate tax fraud. That is why it is more important than ever for firms to employ the services of an accountant in the Wirral to help ensure that everything is in order.

Posted by Louise
December 22, 2015
Research & Statistics

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