UK Looses 40 Billion to Tax Evaders

May 21, 2014 Taxation in UK

LONDON – The government of the UK could double its funding for housing, the environment and transport if tax authorities begin to adequately cracked down on tax evasion occurring in the country.

UK based businesses evaded as much as GBP 40 billion of VAT, income tax, and national insurance contributions over the course of the 2011, according to the results of new study released on May 20th by the non-government organization Tax Research UK.

The research indicated that UK based businesses hid approximately GBP 100 billion of sales from tax authorities by intentionally failing to record the transactions or by not filing any annual tax returns.

According to the experts of Tax Research UK, unless action is taken immediately by tax authorities to address the situation, the amount of unpaid of tax revenues could rise to as much as GBP 47 billion in this year alone.

The potential losses are very significant, and are enough to cover the government’s entire annual expenditure on the armed forces, or the combined cost of all government support for housing, transport, and environmental projects.

Tax Research UK specifically indicated that these latest estimates show that the HMRC does not fully grasp the extent of tax evasion occurring in the country, underestimating tax losses by as much as four times the real amount.

However, shortly following the release of these results, the HMRC downplayed the findings, claiming that the methodology used to calculate tax losses was flawed in theory and in implementation.

Photo by: reynermedia