HMRC Losing Out on 20 Billion Per Year

August 15, 2013 Taxation in UK

HM Revenue and CustomsLONDON – The UK government could fund billions in public sector projects and could even retract numerous spending cuts if national tax authorities could raise their own operating efficiency.

The UK government could collect an extra GBP 20 billion in taxes every year if the HM Revenue and Customs (HMRC) expands more efforts to raise the efficiency of its tax collections operations, according to new a statement issued on August 14th by the UK Local Government Association (LGA).

The Association claims that local councils in the UK have repeatedly demonstrated greater efficiency than the HMRC at collecting taxes, routinely bringing to budget as much as 97.5 percent of all taxes owed by taxpayers.

In comparison the HMRC collects no more than 93.25 percent of taxes owed, with the shortfall amounting to nearly GBP 32 billion per year.

According to the LGA, nearly GBP 5 billion of the uncollected taxes are caused by administrative errors and a failure to take reasonable care by the HMRC, with the additional GBP 27 billion of losses being caused by tax evasion, tax avoidance, legal loopholes.

Justifying the call for immediate attention, the chairperson of the Finance Panel of the LGA Sharon Taylor noted that the missed payments are more than double the amount of spending cuts announced by the government this year, and the extra tax revenues could have be used to pay for roading, schooling, and other public sector projects.

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