Fraud against government costs £700m, says KPMG

FRAUD against the UK government is costing the public purse almost £700m a year, leading consultant KPMG will announce today.

Fraud had reached a peak of £679m in 2006-07, before dropping to £286m in 2008-09 following a VAT-related clampdown.

Yet fraud surged to a fresh high of £693m in 2010-11.

“Financial criminals are now becoming more businesslike and methodical,” said KPMG’s Jeremy Outen.

New taxes such as carbon trading and green tax allowances have provoked fraudulent activity, the research found.

“In addition, technology and large scale processing (such as online or call centres) have made large scale frauds easier to accomplish,” Outen added.

Tax fraud has been the most common kind of fraud since 2009, with 114 court cases in the last year.