According to a recent study In the shade: Research on the UK’s missing economy, published by Richard Murphy of Tax Research UK, the Treasury is losing more than £40bn of tax a year because of evasion and the hidden economy, which is nearly four times official estimates.
Murphy called for tougher checks on hundreds of thousands of ‘shadow’ companies that did not file tax returns, which he estimated resulted in a £12bn loss of tax revenue.
However, HMRC has criticised Mr Murphy’s shadow economy estimate for its ‘highly inappropriate’ methodology. But it accepts there are big losses from under-declaration of income by small and medium-sized business, which account for nearly half the tax ‘gap’ – the difference between tax collected and what it ought to collect.
According to a recent study In the shade: Research on the UK’s missing economy, published by Richard Murphy of Tax Research UK, the Treasury is losing more than £40bn of tax a year because of evasion and the hidden economy, which is nearly four times official estimates.
Murphy called for tougher checks on hundreds of thousands of ‘shadow’ companies that did not file tax returns, which he estimated resulted in a £12bn loss of tax revenue.
However, HMRC has criticised Mr Murphy’s shadow economy estimate for its ‘highly inappropriate’ methodology. But it accepts there are big losses from under-declaration of income by small and medium-sized business, which account for nearly half the tax ‘gap’ – the difference between tax collected and what it ought to collect.
