This page contains a selection of third-party reports that provide evidence to support the argument above. It is not intended to be comprehensive. The sections of text below summarise relevant arguments from the reports cited. Click on the relevant report card to read the original report.
HMRC’s Tax Gap 2022 Edition – TaxWatch Briefing
TaxWatch
HMRC’s Tax Gap 2022 Edition – TaxWatch Briefing
TaxWatchJune 27, 2022
Official statistics underplay the scale of tax avoidance and evasion
The latest annual estimate by HM Revenue and Customs of the ‘tax gap’ (the difference between the amount of tax owed and the amount of tax paid, ie the scale of non-compliance) is £32bn, or 5.1% of total tax revenues, which is similar to previous years. However, the percentage that is due to fraud is higher than before, at 45%. But these figures significantly underestimate the true scale of non-compliance with the tax system, by leaving out profit-shifting (tax avoidance) by multinational companies, which could cost the exchequer up to £20bn per year, by excluding estimates of error and fraud in the HMRC-administered COVID support schemes, and by ignoring overseas tax evasion (however, in a hopeful sign, the UK government has finally pledged to expose how much money is lost through overseas tax evasion; it is estimated that £570bn is held by UK residents in tax havens.)
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Benefits are falling in real terms
Benefits are falling in real terms
Children with special needs are not well enough supportedChildren with special needs are not well enough supported
Disadvantage undermines people’s capabilities and opportunitiesDisadvantage undermines people’s capabilities and opportunities
Genetic differences only play a small part in determining educational outcomesGenetic differences only play a small part in determining educational outcomes
High levels of inequality lead to low levels of social mobilityHigh levels of inequality lead to low levels of social mobility
Higher levels of inequality make a wide range of social problems worse for everyoneHigher levels of inequality make a wide range of social problems worse for everyone
Income inequality is high by historical and European standards Income inequality is high by historical and European standards
Levels of trust and social cohesion are lowLevels of trust and social cohesion are low
Levels of wellbeing are decliningLevels of wellbeing are declining
Many high earners are paid unreasonably large amounts of moneyMany high earners are paid unreasonably large amounts of money
Millions are unable to afford decent housing Millions are unable to afford decent housing
Parenting support only makes a small differenceParenting support only makes a small difference
People from poorer backgrounds are less likely to get to and do well at universityPeople from poorer backgrounds are less likely to get to and do well at university
People from poorer backgrounds do less well at schoolPeople from poorer backgrounds do less well at school
People from poorer backgrounds earn less moneyPeople from poorer backgrounds earn less money
Poor quality work undermines people’s physical and mental healthPoor quality work undermines people’s physical and mental health
Poorer people don’t have a buffer against economic shocksPoorer people don’t have a buffer against economic shocks
Public services are often worse in deprived areasPublic services are often worse in deprived areas
Socio-economic inequality leads to environmental inequalitySocio-economic inequality leads to environmental inequality
Socio-economic inequality leads to health inequalitiesSocio-economic inequality leads to health inequalities
Socio-economic inequality leads to more crime and less effective criminal justiceSocio-economic inequality leads to more crime and less effective criminal justice
Socio-economic inequality leads to political inequalitySocio-economic inequality leads to political inequality
The best way to become wealthy is to be wealthy alreadyThe best way to become wealthy is to be wealthy already
The education system can never totally compensate for disadvantageThe education system can never totally compensate for disadvantage
The nature of poverty is changingThe nature of poverty is changing
The rising costs of living hit poorer households harderThe rising costs of living hit poorer households harder
The structure of our economy leads to huge regional inequalitiesThe structure of our economy leads to huge regional inequalities
The tax system could be designed to be more progressiveThe tax system could be designed to be more progressive
There are still high levels of tax evasion and avoidanceThere are still high levels of tax evasion and avoidance
There is little relationship between merit and rewardThere is little relationship between merit and reward
Too many people are on low incomes and in insecure workToo many people are on low incomes and in insecure work
Wealth inequality is much larger than income inequalityWealth inequality is much larger than income inequality
Wealth is taxed at much lower rates than incomeWealth is taxed at much lower rates than income
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