New report: Comparing the prosecution of tax crime with benefits crime

A new report from TaxWatch: “Equality before the law? HMRC’s use of criminal prosecutions for tax fraud and other revenue crimes. A comparison with benefits fraud”, reveals the huge disparity between the way in which benefits crime is treated in the UK when compared to tax crime.

The report finds that between 2009 and 2019 the UK prosecuted 23 times more people for benefits offences than tax offences. This is despite the value of tax fraud being nine times higher than benefits fraud.

The research further reveals that:

  • The DWP employs 3.5x more staff in compliance than HMRC (adjusted for size of tax and benefits gaps)

  • Over the past 11 years there have been 86,000 criminal prosecutions for benefits crimes, compared to 3,665 prosecutions for tax crime

  • 8.5x more suspended or immediate custodial sentences have been handed down for benefits crime vs tax crime over the last 11 years

  • The number of criminal prosecutions relating to tax crime of all kinds have decreased by 39% since 2015

  • HMRC has improved its focus on serious and complex tax crime, with the number of investigations in this area increasing from 50 to 400 between 2015 and 2020

HMRC told TaxWatch that since the launch of its Fraud Investigation Service in 2016, it has “launched over 76,000 civil cases and more than 4,000 criminal investigations”.

According to the latest DWP annual report, the agency concluded 46,000 fraud investigations and referred 2,000 cases for criminal prosecution in one year.

The full report can be seen here, or downloaded in pdf format here.