TaxWatch is an investigative think tank shining a forensic light on who pays tax, who doesn’t, and why
The best spent money in Whitehall?
New figures show that HMRC’s efforts to make taxpayers pay the right tax brought in £22 for every £1 spent last year. That’s exceptional value for money. Nonetheless beneath the headline numbers there’s a more complicated story about how HMRC’s tax compliance efforts are changing.
Not just vape shops – the small business tax gap
According to HMRC figures released this week, small businesses are underpaying £37bn of due tax every year – roughly the replacement cost of Britain’s nuclear submarines. But this giant figure, already driving resource decisions, rests on an analysis of just 337 tax returns. And much of the missing tax may be accountants getting tax returns wrong, not high-street criminality and deliberate tax fraud.
The tax gap seems to be getting worse – and by more than we thought
HMRC’s latest figures present a very different picture to previous years. The amount of due taxes going unpaid may be £6 billion bigger than previously thought — and going up, not down. Any incoming prime minister (or Chancellor) will have to go faster and further to tackle tax non-compliance if they want to stick to current spending commitments, let alone introduce new ones.
HMRC tells MPs it doesn’t know how many large businesses it’s investigating for tax fraud
On 18 May, MPs quizzed senior HMRC officials about how they’re making the biggest multinational companies pay their due taxes. HMRC officials confirmed TaxWatch’s findings that HMRC simply doesn’t know some key facts about its own tax enforcement efforts: including, astonishingly, how many large businesses they are currently investigating for tax fraud or other serious, deliberate tax non-compliance.