HER MAJESTY’S Revenue and Customs has missed out on collecting £27.4bn in tax revenues thanks to reductions and write-offs over the last five years, according to research out today.
Lost income tax alone accounts for a massive £4.4bn over five years, and the amount of this tax failing to make its way into the government coffers last year was 52 per cent higher than in 2006-07, a paper commissioned by the Taxpayers’ Alliance and the Institute of Directors claims.
However, the total amount of revenue lost in 2010-11 was 7.9 per cent lower than the previous year, at £5.8bn.
The complex tax credits system is where the bulk of remissions are made, with £600m being lost this way, while VAT write-offs have wiped out £1.9bn of public revenue in the last year alone, the research shows.
HMRC was last month slammed by the Treasury select committee for its “disturbing” and “unacceptable” behaviour towards those who fail to pay their tax bills, as well as its increasingly complicated rules and regulations that risk wasting money.
Matthew Elliott, chief executive of the Taxpayers’ Alliance, said: “Some of this uncollected tax will be down to the recession but there is clearly a long term problem as well.”
City A.M. Reporter