Britons owe an “eye-watering” £42 billion ($51 billion) in unpaid tax, with about 5 per cent of the money owed each year failing to be collected by HM Revenue and Customs, the Commons Public Accounts Committee has found.
MPs have said that billions of pounds could be spent on public services if the taxes were collected.
The Liberal Democrats called the amount owed “absolutely staggering” and said “serious action to close this tax gap black hole” must be taken as the country battles a cost-of-living crisis.
It comes at a time when several sectors, from railway workers to nurses, are striking over pay in the face of high inflation and stretched public finances.
In a report published on Wednesday, MPs criticised ministers for not doing more to claw back the money owed to the public purse.
“The eye-watering £42 billion now owed to HMRC in unpaid taxes would have filled a lot of this year’s infamous public spending black hole,” said Dame Meg Hillier, chairwoman of the committee.
“But the public purse will continue missing out on billions of desperately needed revenue as HMRC will only employ more staff to tackle compliance over the next few years — not fast enough to dent the tax gap at a time of huge public sector spending pressures.”
The committee's “HMRC Performance in 2021—22" report recommended that the tax body set out “what level of investment” its compliance team would require to “reduce the size of the tax gap”.
According to the 22-page document, HMRC collected £731.1 billion in taxes and duties in 2021-22 — the highest on record as Britain emerged from the pandemic.
But despite that, the committee said more could be done to claim unpaid taxes.
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“In June 2022, £42 billion was owed to HMRC in tax debt, much more than before the pandemic,” said the report.
“This debt is now set to fall more slowly than initially expected as taxpayers feel the effects of the cost-of-living crisis.
“In 2021—22, HMRC generated £30.8 billion from its compliance activities, though this also remains below pre-pandemic levels of performance.
“For every £1 that HMRC spends on compliance activities, it recovers £18 in additional tax revenue.
“The government is missing the opportunity to recover billions in lost revenue by not resourcing compliance.”
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MPs also said there was a “moral duty” to continue to go after money lost through fraud during the Covid pandemic.
The committee said it was “disappointed” that HMRC “only expects to recover around a quarter of the £4.5 billion” that it calculates was lost to fraud and error in coronavirus support programmes.
That amounts to 4.6 per cent of the £96.9 billion handed out by the UK government to support businesses through pandemic restrictions, including furlough.
A temporary task force has been given £100 million to look into 40,000 cases but HMRC said that it forecasts the team will retrieve £1.1 billion, still leaving more than £3 billion unaccounted for.
MPs said that the forecast meant the rate of return for the funding was expected to be less than if invested in tax compliance.
“The PAC has reported on the many problems in the Covid support schemes that made an open goal for fraudsters, but HMRC is settling for trying to recover less than a quarter of estimated losses in schemes such as furlough,” said Dame Meg.
“We recognise the problems HMRC faces — due to poor controls, the horse has bolted — but we believe there is a moral duty to pursue fraud.
“HMRC must ensure dishonesty is not seen to create advantage.”
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Christine Jardine, the Liberal Democrat Cabinet Office spokeswoman, said: “This government is losing absolutely staggering amounts of money through its incompetence and inability to collect the tax it’s owed.
“We need to see serious action to close this tax gap black hole.
“Ministers need to immediately get a grip on this situation, anything less would be a failure for millions of people who are struggling with the cost-of-living crisis.”
Pat McFadden, Labour’s shadow chief secretary to the Treasury, said: “The government should be trying to recover every pound of this before hitting households with more tax.
“It’s not just the tax unpaid, but the sums lost to Covid fraud which show the extent of the problem.
“The Tory record is one of waste, fraud and more and more taxes to make up for their mistakes.”
An HMRC spokesman responded: “Since 2005, we have cut the UK’s tax gap by more than 30 per cent, and we continue to prioritise collecting unpaid taxes, which is why we are adding a further 2,500 people to our compliance teams as well as rolling out our digital offer to ensure everyone pays what is due.
“We take a supportive approach to taxpayers in debt and balance that with recovering debt from those who can afford it.
“A blanket approach would put thousands of people and businesses to the wall.
“The Covid support schemes protected millions of jobs and businesses during the unprecedented pandemic and, whilst we ensured payments were not unnecessarily delayed, we also minimised fraud through compliance checks and have protected £1.2 billion so far.”
A Cat, A Man, and Two Women
Junichiro Tamizaki
Translated by Paul McCarthy
Daunt Books
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
Killing of Qassem Suleimani
ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Company profile
Name: Dukkantek
Started: January 2021
Founders: Sanad Yaghi, Ali Al Sayegh and Shadi Joulani
Based: UAE
Number of employees: 140
Sector: B2B Vertical SaaS(software as a service)
Investment: $5.2 million
Funding stage: Seed round
Investors: Global Founders Capital, Colle Capital Partners, Wamda Capital, Plug and Play, Comma Capital, Nowais Capital, Annex Investments and AMK Investment Office
Frida%20
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3ECarla%20Gutierrez%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%3C%2Fstrong%3E%20Frida%20Kahlo%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
CHINESE GRAND PRIX STARTING GRID
1st row
Sebastian Vettel (Ferrari)
Kimi Raikkonen (Ferrari)
2nd row
Valtteri Bottas (Mercedes-GP)
Lewis Hamilton (Mercedes-GP)
3rd row
Max Verstappen (Red Bull Racing)
Daniel Ricciardo (Red Bull Racing)
4th row
Nico Hulkenberg (Renault)
Sergio Perez (Force India)
5th row
Carlos Sainz Jr (Renault)
Romain Grosjean (Haas)
6th row
Kevin Magnussen (Haas)
Esteban Ocon (Force India)
7th row
Fernando Alonso (McLaren)
Stoffel Vandoorne (McLaren)
8th row
Brendon Hartley (Toro Rosso)
Sergey Sirotkin (Williams)
9th row
Pierre Gasly (Toro Rosso)
Lance Stroll (Williams)
10th row
Charles Leclerc (Sauber)
arcus Ericsson (Sauber)
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
Voices: How A Great Singer Can Change Your Life
Nick Coleman
Jonathan Cape
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
Dirham Stretcher tips for having a baby in the UAE
Selma Abdelhamid, the group's moderator, offers her guide to guide the cost of having a young family:
• Buy second hand stuff
They grow so fast. Don't get a second hand car seat though, unless you 100 per cent know it's not expired and hasn't been in an accident.
• Get a health card and vaccinate your child for free at government health centres
Ms Ma says she discovered this after spending thousands on vaccinations at private clinics.
• Join mum and baby coffee mornings provided by clinics, babysitting companies or nurseries.
Before joining baby classes ask for a free trial session. This way you will know if it's for you or not. You'll be surprised how great some classes are and how bad others are.
• Once baby is ready for solids, cook at home
Take the food with you in reusable pouches or jars. You'll save a fortune and you'll know exactly what you're feeding your child.
Ziina users can donate to relief efforts in Beirut
Ziina users will be able to use the app to help relief efforts in Beirut, which has been left reeling after an August blast caused an estimated $15 billion in damage and left thousands homeless. Ziina has partnered with the United Nations High Commissioner for Refugees to raise money for the Lebanese capital, co-founder Faisal Toukan says. “As of October 1, the UNHCR has the first certified badge on Ziina and is automatically part of user's top friends' list during this campaign. Users can now donate any amount to the Beirut relief with two clicks. The money raised will go towards rebuilding houses for the families that were impacted by the explosion.”
SQUAD
Ali Khaseif, Fahad Al Dhanhani, Adel Al Hosani, Mohammed Al Shamsi, Bandar Al Ahbabi, Mohammed Barghash, Salem Rashid, Khalifa Al Hammadi, Shaheen Abdulrahman, Hassan Al Mahrami, Walid Abbas, Mahmoud Khamis, Yousef Jaber, Saeed Ahmed, Majed Sorour, Majed Hassan, Ali Salmeen, Abdullah Ramadan, Khalil Al Hammadi, Fabio De Lima, Khalfan Mubarak, Tahnoun Al Zaabi, Ali Saleh, Caio Canedo, Muhammed Jumah, Ali Mabkhout, Sebastian Tagliabue, Zayed Al Ameri
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Short-term let permits explained
Homeowners and tenants are allowed to list their properties for rental by registering through the Dubai Tourism website to obtain a permit.
Tenants also require a letter of no objection from their landlord before being allowed to list the property.
There is a cost of Dh1,590 before starting the process, with an additional licence fee of Dh300 per bedroom being rented in your home for the duration of the rental, which ranges from three months to a year.
Anyone hoping to list a property for rental must also provide a copy of their title deeds and Ejari, as well as their Emirates ID.
MATCH INFO
Uefa Champioons League semi-final, first leg:
Liverpool 5
Salah (35', 45 1'), Mane (56'), Firmino (61', 68')
Roma 2
Dzeko (81'), Perotti (85' pen)
Second leg: May 2, Stadio Olimpico, Rome
COMPANY%20PROFILE
%3Cp%3E%3Cstrong%3ECompany%3A%3C%2Fstrong%3E%20Vault%3Cbr%3E%3Cstrong%3EStarted%3A%20%3C%2Fstrong%3EJune%202023%3Cbr%3E%3Cstrong%3ECo-founders%3A%20%3C%2Fstrong%3EBilal%20Abou-Diab%20and%20Sami%20Abdul%20Hadi%3Cbr%3E%3Cstrong%3EBased%3A%20%3C%2Fstrong%3EAbu%20Dhabi%3Cbr%3E%3Cstrong%3ELicensed%20by%3A%3C%2Fstrong%3E%20Abu%20Dhabi%20Global%20Market%3Cbr%3E%3Cstrong%3EIndustry%3A%20%3C%2Fstrong%3EInvestment%20and%20wealth%20advisory%3Cbr%3E%3Cstrong%3EFunding%3A%20%3C%2Fstrong%3E%241%20million%3Cbr%3E%3Cstrong%3EInvestors%3A%20%3C%2Fstrong%3EOutliers%20VC%20and%20angel%20investors%3Cbr%3E%3Cstrong%3ENumber%20of%20employees%3A%20%3C%2Fstrong%3E14%3Cbr%3E%3C%2Fp%3E%0A
