Fair taxes

We know that taxes are a huge part of what makes our society work well. Whether paying for hospitals, schools or police, everyone contributing their fair share of tax is vital to ensure that we can invest in the things that British people care about.

However, our research shows that every year we lose at least £35bn in taxes that HMRC fails to collect. This is more than our entire annual spend on police, fire services, courts, and prisons combined.

At a time when Britain is looking to make the transition to net zero, support an ageing population and level up its economy, we can’t afford a tax gap of this scale. Tackling it would bring in cash, whilst ensuring fair play, reinforcing the importance of the rule of law and ensuring voters feel confident that the system works for them.

Our research has shown that British people would support moves to strengthen tax regulations, with little appetite for a weakening of existing safeguards.

Fair taxes

We know that taxes are a huge part of what makes our society work well. Whether paying for hospitals, schools or police, everyone contributing their fair share of tax is vital to ensure that we can invest in the things that British people care about.

However, our research shows that every year we lose at least £35bn in taxes that HMRC fails to collect. This is more than our entire annual spend on police, fire services, courts, and prisons combined.

At a time when Britain is looking to make the transition to net zero, support an ageing population and level up its economy, we can’t afford a tax gap of this scale. Tackling it would bring in cash, whilst ensuring fair play, reinforcing the importance of the rule of law and ensuring voters feel confident that the system works for them.

Our research has shown that British people would support moves to strengthen tax regulations, with little appetite for a weakening of existing safeguards.

The UK’s tax enforcement gap

We know we will never collect every penny of tax owed, but cuts to HMRC mean they are struggling to make sure everyone plays by the rules – with over £35bn going missing every year.

Recent years have seen a gradual erosion in investment into collecting taxes. HMRC’s budget was reduced by 40% from 2000 to 2016. Following this, the Treasury committed only to giving HMRC the resources necessary to keep performance at 2015-16 levels. HMRC now has around 62,000 members of staff, down from a peak of 100,000 in 2006.

This has had a material impact on enforcement. Between 2016 and 2019 the number of audits and investigations conducted by HMRC fell by a third.

The work of HMRC offers significant value for money, with an average return of £15 for every £1 spent on ensuring the proper amount of tax is collected. If redistributed equally, halving the tax gap would put £500 in every taxpayer’s pocket.

Tax Gap Report
UK Enforcement Gap
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