Richard shows some tables from the HMRC report on the tax gap. They show that very large numbers of peeps aren\’t filling in their forms correctly.
Overall HM Revenue & Customs say 30% of returns have errors. Overall 12% of liabilities are under-reported as a resulted. For the self employed 45% error rates arise. And remember – these ratios ignore almost entirely the true shadow economy – those who are entirely outside the self assessment system altogether and who quite ludicrously HM Revenue & Customs pretend basically do not exist.
This data does not say there is a marginal problem with tax compliance. This data says there is a massive problem with tax compliance.
OK, that\’s very interesting indeed.
What should we do about it?
Only more resources can tackle this problem.
And the resources required are not a limited range of specialists. The resources required are large numbers – tens of thousands – of qualified tax officials working in tax offices throughout the UK to collect the tax that is owing. I have estimated that £15 to £20 billion a year could be collected if this was done and appropriate legislation was put in place.
That\’s very interesting indeed actually.
For there are a couple of tables in that HMRC report which Richard doesn\’t show us. 8.1 for example, which tells us of the total identified amount lost through individuals cocking up their self-assessment. £3.1 billion. 8.5, the amount lost to employers screwing up: £1.1 billion.
You know, I think Richard\’s found the magic money tree. Just by hiring more taxmen we can collect £20 billion in tax when only £4.2 billion is actually due.
Isn\’t that wonderful?