Cost of benefit fraud = £800m a year.
Tax avoidance by the super-rich costs the British taxpayer £13bn a year – enough money to increase old-age pensions by 20 per cent.
The first ever forensic study of Revenue figures to establish the true scale of tax avoidance by some of the wealthiest people in Britain will pile pressure on the government to prevent the tax burden falling disproportionately on ordinary working people.
The study, commissioned by the TUC and to be published later this week, estimates the Treasury annually misses out on £3.8bn through the controversial non-domicile tax laws, which allow those with overseas connections to escape tax on their income. So called ‘income shifting’ by millionaires, which includes placing wealth in the name of a spouse or setting up a limited company to shield income, costs the UK £3.2bn. Tax planning and other loopholes account for the remaining £6bn.
TUC leader Brendan Barber said: ‘For years there has hardly been any debate about whether the tax system is fair. But a wise government would recognise the shift in public mood when they see police officers marching against a decision that a modest pay rise was unaffordable when it looks like tax has become optional for a small group of the super-rich.’
Lib Dem Treasury spokesman Vince Cable said: ‘The government has created new loopholes for the super-rich to avoid paying tax. Even last week, by setting capital gains tax at 18 per cent when the top rate of income tax is 40 per cent, they’ve allowed potential for clever accountants to turn income into capital.