Tax avoiders and cheats cost the public purse £35billion last year

<p>The taxman is failing to collect more than £35billion a year from cheats who refuse to pay their taxes and others who find ways of avoiding them, a report from MPs will warn today. It also found that job cuts at HM Revenue and Customs has resulted in £1billion of tax revenue not being tracked down. The size of the country’s so-called ‘tax gap’ will infuriate millions of honest taxpayers. Hole: The country's 'tax gap' was £35billion last year after thousands avoided or simply refused paying taxes The tax gap is the difference between the amount of money collected by the tax authorities and the amount they should get if everybody paid the correct amount of tax. The report from the Public Accounts Committee said an extra £35billion should have been collected in 2009/10 – equal to eight per cent of the total tax bill – if everybody had paid the correct amount.   More... Can't save? won't save? Don't worry, the thrifty will pay your pension for you Single rate 30% income tax 'would boost economy' In a further blow, it said the amount which is going missing as a result of ‘error, avoidance and evasion’ could be ‘much greater’. The report warns: ‘It is clear that there is significant potential for additional tax revenue, which could help with the Government’s deficit reduction programme.’  It also raises doubts about the wisdom of slashing staff numbers. Between 2006 and 2011, it says the department’s compliance and enforcement division reduced staff numbers by 3,387 to 26,000. Big difference: The report also found that job cuts at HM Revenue and Customs has resulted in £1billion of tax revenue not being tracked down The report states: ‘It has estimated that around £1.1billion of additional revenue could have been generated had these staff reductions not been made.’ For every £1 which has been saved, it has lost around £10 in tax revenue, it added. An HMRC spokesman said: ‘We will bring in an additional £7billion by 2014 through tackling abuse of the tax rules.’ Last year, the tax system was described as ‘inefficient, overly complex and frequently unfair’, following a study by the Institute for Fiscal Studies.</p>

Tax avoiders and cheats cost the public purse £35billion last year

The taxman is failing to collect more than £35billion a year from cheats who refuse to pay their taxes and others who find ways of avoiding ...

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