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Setback for HMRC, as 'tax gap' rises | Setback for HMRC, as 'tax gap' rises |
(35 minutes later) | |
HM Revenue and Customs (HMRC) has announced a rise in the "tax gap" - the difference between the amount of tax it should collect in theory, and the actual total. | HM Revenue and Customs (HMRC) has announced a rise in the "tax gap" - the difference between the amount of tax it should collect in theory, and the actual total. |
In the year to April 2013, the gap rose to £34bn, from £33bn the year before. | In the year to April 2013, the gap rose to £34bn, from £33bn the year before. |
The size of the gap rose to 6.8% of the total, after previously falling for seven consecutive years. | The size of the gap rose to 6.8% of the total, after previously falling for seven consecutive years. |
HMRC blamed the rise on criminal fraud, and people making mistakes on their tax returns. | HMRC blamed the rise on criminal fraud, and people making mistakes on their tax returns. |
The rise comes despite HMRC being put under pressure by the government to raise more money in tax, and being given extra resources to do so. | The rise comes despite HMRC being put under pressure by the government to raise more money in tax, and being given extra resources to do so. |
"These damning figures show that this government is totally failing to tackle tax avoidance and evasion," said Shabana Mahmood, Labour's shadow exchequer secretary to the Treasury. | |
"According to HMRC's own assessment, the amount of uncollected tax rose again last year and has now gone up by £3bn," she said. | |
Tax avoidance | |
It also follows criticism of HMRC from MPs on the Public Accounts Committee (PAC). | |
The MPs pointed out that the tax gap does not include money lost to the Treasury through aggressive tax avoidance schemes. | The MPs pointed out that the tax gap does not include money lost to the Treasury through aggressive tax avoidance schemes. |
In December 2013, the MPs accused HMRC of "losing its nerve" when mounting tax prosecutions against multi-national corporations. | In December 2013, the MPs accused HMRC of "losing its nerve" when mounting tax prosecutions against multi-national corporations. |
However HMRC said the total lost to the government in 2012/13 had fallen to 6.8%, from 8.5% in 2005/06. | However HMRC said the total lost to the government in 2012/13 had fallen to 6.8%, from 8.5% in 2005/06. |
An HMRC spokesman said that the UK had one of the lowest tax gaps in the world. | |
At the other end of the spectrum, he said that Mexico had a gap of 25%. | |
Earlier this month HMRC admitted that tens of thousands of tax-payers would have to be sent another statement, after errors on previous tax demands. | Earlier this month HMRC admitted that tens of thousands of tax-payers would have to be sent another statement, after errors on previous tax demands. |
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