Tax dodgers are costing the UK £120 billion a year, says PCS

by - 21st September 2011, 14.24 GMT

THE amount of tax lost to our public finances every year is more than three times the government’s estimate, the Public and Commercial Services union says.

The union carried out its own research which shows the amount of tax lost to our public finances every year is more than three times the government’s estimate.

Today’s claim by HM Revenue and Customs that there is a £35 billion tax gap – money lost through tax evasion, avoidance and not being collected – massively underestimates the problem.

The union, whose own research puts the tax gap at around £120 billion, has cast serious doubts on HMRC’s methodology and says the department has refused to share details of the model it uses to estimate its figures.

This follows a re-announcement by chief secretary to the Treasury Danny Alexander at the Liberal Democrats conference earlier this week that an additional 2,250 HMRC staff will move into new anti-evasion and avoidance jobs. He also pointed to government plans to invest over £900 million in HMRC, which the Treasury agreed last year to help tackle £7 billion in lost revenue before 2015.

Even with this, the government’s spending cuts mean HMRC will lose £2.1 billion and around 10,000 jobs by 2015. These come on top of 30,000 jobs that have been cut since the creation of HMRC in 2005.

Danny Alexander’s speech came just days after more HMRC office closures were announced, including the tax office in Wick, in his own backyard.

PCS general secretary Mark Serwotka said: “By any measure, £35 billion is a lot of money and it ought to be chased. But we estimate the real figure is more than three times that, and cuts in HMRC are leaving the department unable to cope.

“Instead of cutting jobs and offices, ministers should invest to rigorously pursue the tens of billions of pounds in tax lost through the use of tax havens and evasion and avoidance tactics by big corporations and the very wealthy.”