Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

Tax dodging and non-compliance during pandemic cost UK £9bn

by December 16, 2022
December 16, 2022
Tax dodging and non-compliance during pandemic cost UK £9bn

Tax dodging and non-compliance during the pandemic cost the government £9bn, Whitehall’s spending watchdog has found.

The loss to the public purse came as HM Revenue & Customs (HMRC) moved thousands of tax compliance staff to Covid support schemes, reducing its capacity to investigate people and businesses not paying the right amount, according to the National Audit Office.

About 1,350 workers were redeployed to Covid schemes throughout 2020-2021, shrinking the number of those working on tax compliance by 12%, the NAO said.

Before the pandemic, tax revenues from HMRC’s compliance work were on average 5.2% of its total revenues. This dropped to 4.2% between 2020-2022 – a £9bn reduction.

During the pandemic, HMRC paused many inquiries into suspected non-compliance, except in cases of potential fraud or criminal activity, closing 29% fewer cases in 2020-21 than in the previous year. Lockdowns meant the department also conducted fewer in-person investigations.

With many courts not operating at the time, criminal prosecutions for tax-related offences plummeted to 163 in 2020-21 from about 700 in the year before.

Instead of returning to normal levels after the pandemic, HMRC analysis indicates that the tax gap – the difference between the amount of money owed to and received by the department – is likely to continue growing over the next few years.

While the department is recruiting and training new compliance staff, they will be less experienced and therefore less effective in the short term, according to the watchdog, which called on HMRC to improve the effectiveness of its compliance work to ensure more money is available for cash-strapped public services.

The head of the NAO, Gareth Davies, said: “HMRC had to move swiftly to reallocate resources to Covid-19 schemes, as the circumstances of the pandemic demanded. However, this directly affected its ability to investigate cases of people and businesses not paying the right tax.

“There is now a risk that more people ultimately fail to pay the right tax or escape investigation or prosecution. It is concerning that HMRC’s planning indicates that non-compliance may grow following the pandemic. The next two years are critical, and swift action is likely to be needed to stem potential losses.

“There is little doubt that HMRC’s compliance work offers good value for money, but it needs to evaluate its performance more consistently. Improving the effectiveness of HMRC’s compliance work can help maximise the amount of money available for public services in a challenging economic context.”

Meg Hillier MP, the chair of the Commons public accounts committee, said: “HMRC must step up its work on tax compliance, through allocating sufficient resources and better understanding the effectiveness of its work. With significant pressures on public finances, there is no time to lose.”

An HMRC spokesperson said: “We welcome the NAO’s confirmation that our compliance work offers good value for money. Through it, we target the areas where tax is most at risk of not being paid and prioritise the highest-value returns – exactly as taxpayers would expect.

“This does not mean other money will go uncollected, however, and we can go back up to 20 years in the most serious cases of evasion. We’re adding a further 2,500 people to our compliance workforce next year, increasing our ability to recover unpaid tax and ensure everyone pays what is due.”

Read more:
Tax dodging and non-compliance during pandemic cost UK £9bn

0
FacebookTwitterGoogle +Pinterest
previous post
UK Retail sales fall despite Black Friday and World Cup
next post
Britain falling behind with full-fibre broadband roll out

You may also like

West coast main line faces decade-long closures in...

January 15, 2025

Amazon cuts 18,000 jobs to lower costs

January 5, 2023

Jeremy Vine pursued by HMRC for alleged unpaid...

July 10, 2024

Anthony Scaramucci warns of impact on UK trade...

November 12, 2024

When is it the Right Time to Ask...

April 30, 2024

OpenAI challenges Google’s search engine dominance with launch...

July 26, 2024

Sunak set to end inheritance tax in spring...

December 27, 2023

Qualifying B2B Leads: How to Focus on the...

October 16, 2024

Oracle Red Bull Racing and Rokt Launch Talent...

June 26, 2023

Royal Mail loses 360-year monopoly on delivering parcels...

November 7, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Trump, lawmakers react after ‘big, beautiful bill’ clears Senate hurdle

      June 29, 2025
    • How Staff Can Strengthen HIPAA Compliance and Security

      June 29, 2025
    • Lotus denies plans to close Hethel factory amid US expansion talks

      June 29, 2025
    • Top university degrees lose sway as tech employers prioritise job-ready skills

      June 29, 2025
    • Government urges supermarkets to make healthy food more appealing in bid to tackle obesity crisis

      June 29, 2025
    • Senate Republicans ram Trump’s ‘big, beautiful bill’ through key test vote

      June 29, 2025

    Categories

    • Business (8,334)
    • Investing (2,081)
    • Politics (15,854)
    • Stocks (3,177)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved