Not only do I think they should estimate better tax gap estimates, for reasons that I explain in this article I also believe that those that those that they calculate for tax avoidance, tax evasion and unpaid tax are insufficient, because there are also tax gaps arising as a consequence of policy decisions, e.g. choosing not to tax wealth, and because of excessive tax allowances and relief, which are issues I explore at length in the Taxing Wealth Report. HMRC have never gone near addressing these issues, meaning that their analysis is decidedly partial in its scope.
The tax gap is what Spud thinks should be taxed, not what Parliament does.
Ho Hum.
Won’t be long before he declares himself sovereign, will it?
Commie dick Murphy wants to kill the rich and take their stuff.
Since he can’t say it out loud, he talks around it, always sounding like word salad.
Well in my Taxing Idiots Report I propose a 100% surcharge on model railway owners in Ely and additional taxes on logical fallacies. HMRC have never gone near addressing these issues, meaning that their analysis is decidedly partial in its scope.
In fairness to his analysis I do agree that closure of local tax offices was an error, even greater in some ways than the decision to merge The tax and customs functions.
However, his analysis as ever ignores the fact that what drives evasion is excessive tax and expenditure on the part of the state. The state is far too large and needs to be cut by a minimum of 33% if not more,
– end all expenditure on DEI
– abolish Net Zero and all related bureaucracy
– End any expenditure related to LGBT alphabet soup
All these would be enormously popular with the vast majority. Tax evasion would be less at lower levels of tax. It really is that simple.
HMRC already estimate and publish the “cost of tax reliefs”, divided into “structural” (e.g. the income tax allowance) and “non-structural” (e.g. R&D reliefs).
It’s not part of the ‘Tax Gap’ because that’s the difference between what the law says should be collected and what is.
Murphy’s ideal ‘tax gap’ seems to be GDP minus tax collected.
Some time ago I pointed out the largest part of the alleged gap between VAT paid and VAT that he said ought to be paid was the exemption from VAT of trivially small businesses with sales of less than £60k a year.
He has, at least, been consistent in lying about the tax gap always overstating it to make it, and hence himself, seem more important.
So in summary he considers the tax gap to be everything earned that currently isn’t already nicked by the taxman. Which is a tricky position to defend as were that tax gap to be eliminated it would put people at one of the two defined points of the Laffer curve, so precisely where we don’t need to debate the exact shape of the curve to understand the outcome.
And Murphy never considers the other side of the tax gap – the service provided for the tax taken.
People don’t want to pay because they don’t see the service. Crimes aren’t prosecuted, borders aren’t defended, health care and treatment is neither. At some point, possibly soon, the people might decide that the State has broken the Social Contract and that it no longer applies.
That will be an interesting day.
Our betters seem to forget that there’s a second curve overlaid on Laffer’s: the appropriately-named Black Economy. It’s probably a nearly logarithmic curve, or at least a hockey stick, starting at 0 with Laffer’s on the left, going stratospheric on the right.
It would be interesting to see where we are on that curve at the moment. And digital cash won’t neutralise it. As has been pointed out here lately, government fiat currency isn’t the only game in town. Tabs will do. As for lack of access to government services if you’re under the radar, which government services are they, then?
True, Geoffers. The State got bored doing what it is supposed to do, so they branched out into many other fields. It is for . . . their entertainment. And enrichment of their friends.
For him the tax gap is when tax collected is less than 100 percent – because any money left on the table is going to be the result of policy choices and people arranging their affairs to legally pay less tax.
Norman said:
“Our betters seem to forget that there’s a second curve overlaid on Laffer’s: the appropriately-named Black Economy. … As for lack of access to government services if you’re under the radar, which government services are they, then?”
That’s often not a problem anyway. Certainly down here in rural parts a lot of people have one small part-time job that’s declared, with a bit of tax and NI paid, and then the other income isn’t.
I assume that’s also done in the cities, but perhaps there some groups of people are completely lawless.
I used to be annoyed when trades people wanted cash in hand because why should they avoid tax when I’m paying through the nose?
Now I give it to them by default. Sure it means others will pay more (and the trades people get to use services they haven’t properly contributed to) but the sooner the whole ponzi scheme collapses, the better.
Being completely above board financially is what you do when you can afford it. If you’re faced with an income crisis and your choice is being above board, going bust and ending up in aninescapable McJob/benefits trap, or ducking and diving, surviving, recovering and by doing so making a net saving for the State, you do the latter.
Try it sometime.