Tax dodging is the problem

My good (tax) man Richard Murphy points out the following inconsistency…

Word is that it costs more to fight benefit fraud than benefit fraud actually costs.

This is compared to:

The whole of HM Revenue & Customs’ tax collection activity cost £5 billion to run in 2006-07 (page 32). It collected £423 billion.

We know there is a substantial tax gap though (and I will publish more on this soon – but take this for starters). So where would the £106 million of resource have been better spent? On benefit fraud or tax collection? And since it was obviously the latter, why is it HM Revenue & Customs that is having the staff cuts?

To reiterate:

The government spends more on tracking benefit fraud than it manages to uncover, an official report suggests.

The National Audit Office found that £154m spent on Department for Work and Pensions schemes in 2006/07 had found just £106m of fraudulent claims.

“The department is spending £1.50 to identify every £1 of overpayments,” the report suggested.

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