The Remains of the data

[Odds]

A claim that the amount of money lost to tax evasion is “360x” higher than the amount lost to benefit fraud is re-circulating on social media. The posts feature a graph comparing the amounts “lost yearly” to benefit fraud and benefit error with two estimates of the amount lost to “tax avoided, evaded & uncollected”.

These estimates do not show that the amount lost to tax evasion is 360 times higher than the amount lost to benefit fraud.

 

[motorbiking]

Its well reported

Research to understand evasion in small businesses

www.gov.uk

 

[Odds]

Figures published by the Department for Work and Pensions (DWP) show that in 2023/24 £7.4 billion was overpaid in benefits expenditure due to fraud. This is approximately 2.8% of total benefits spending.

Overall, the government overpaid £9.7 billion in benefits payments, whether through fraud, claimant error or official error.

In 2022/23—the latest year for which both benefit fraud and tax gap figures are available—the DWP estimates £6.3 billion was overpaid in benefits due to fraud.

 

[Odds]

The latest tax gap figure covers the 2022/23 financial year, and estimates that the overall tax gap was £39.8 billion. Of this amount, approximately £5.5 billion was estimated to be lost due to tax evasion (illegal non-payment or underpayment of tax), with £1.8 billion lost due to tax avoidance (avoiding paying tax through schemes that operate “within the letter, but not the spirit, of the law”.
These figures would suggest that the amount of money lost specifically due to “tax evasion” as the posts claim is actually lower than the amount lost to benefit fraud. The estimate of the overall “tax gap” is higher, meanwhile, but only about five times higher.

 

[Murdochcat]

If this tax evasion is so high, employ more staff at HMRC, write the rules with less ambiguity and clamp down. Around here there are many people advertising "cash only prices" - so are they just avoiding tax or avoiding tax, understating their income and claiming UC?

 

[motorbiking]

Anyone on £200k+ a year gets huge scrutiny, from a dedicated team, they go over every detail of your return down to the penny. I'd personally rather just pay them to do the return for me.

Of course plenty of small business owners pay themselves minimum wage and the rest in dividends, even employing their spouse and kids to keep the tax down. Some even admit to having trimmed their tax bill so low, they get income support. Shameful.

 

[Odds]

However, the graph shared on Facebook also features an alternative estimate of the tax gap, published by Richard Murphy, a chartered accountant and founder of the Tax Justice Network advocacy group, who has argued that HMRC significantly understates the amount of tax revenue lost to evasion, avoidance and debt.

A report authored by Mr Murphy and published by the Public and Commercial Services Union (PCS) in 2014 estimated that in the 2013/14 financial year the tax gap was actually £119.4 billion, of which £82.1 billion was accounted for by tax evasion, and £19.1 billion by tax avoidance. This appears to be the other tax figure referenced in the graph.

 

[Mottie]

Around here there are many people advertising "cash only prices" - so are they just avoiding tax or avoiding tax, understating their income and claiming UC?

Avoiding bank charges of course…….

 

[Odds]

In response to the publication of the most recent HMRC tax gap estimate in June 2024, Mr Murphy told the Guardian that the amount of tax not being collected could be closer to £100 billion.

 

[Odds]

Its well reported

Research to understand evasion in small businesses

www.gov.uk

It's hardly a 'small amount' by small business' that contributes to the colossal fraud by corporations taking up to £100bn, is it now?

 

[diy_fun_uk]

The more rich I become (in my fantasy world) the more I would do to ensure I was paying what I'm legally, not morally, obliged to. Not a penny more.

The ginger guy from Scottish Greens was on the telly box this morning and was being asked about Scottish workers being taxed more than other nations. He waffled of course and then said along the lines of 'we're all surely in agreement with the social contract, those that earn more should pay more. They still benefit from things like free education, free prescriptions ...'

I agree those who earn more should pay more tax, within reason.

And what exactly is the social contract? Does it include those on benefits agreeing they should be looking for work and not sitting long term on handouts?

 

[aveatry]

The more rich I become (in my fantasy world) the more I would do to ensure I was paying what I'm legally, not morally, obliged to. Not a penny more.

The ginger guy from Scottish Greens was on the telly box this morning and was being asked about Scottish workers being taxed more than other nations. He waffled of course and then said along the lines of 'we're all surely in agreement with the social contract, those that earn more should pay more. They still benefit from things like free education, free prescriptions ...'

I agree those who earn more should pay more tax, within reason.

And what exactly is the social contract? Does it include those on benefits agreeing they should be looking for work and not sitting long term on handouts?

Add to that people sitting in council houses as a lifestyle choice and not out of need but instead of addressing that with on going income tests now reeves is looking at a year long private landlord rent freeze.

 

[diy_fun_uk]

Add to that people sitting in council houses as a lifestyle choice and not out of need but instead of addressing that with on going income tests now reeves is looking at a year long private landlord rent freeze.

Yep. I know someone (the old friend of a friend thing) who has a council flat. He no longer lives in it, he bunks up with his gf, however he keeps the flat to ensure he still gets full benefits. So the flat is essentially sitting empty bar him popping in to collect mail etc.

 

[aveatry]

I know someone in a council house both have good jobs and a flashy car and 2 foreign holidays a year. There is no way that they need that council house.
Those on council waiting lists have watched as high earning social tenants continue to live in taxpayer-subsidised homes meant to help the most vulnerable.
Not only blocking homes that could benefit those in greater housing need, they’re also relying on poorer taxpayers to subsidise their lifestyle

 

[noseall]

I know someone in a council house both have good jobs and a flashy car and 2 foreign holidays a year

Righto billy.