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'Tax gap' may be £17bn of unpaid taxes

The amount of unpaid tax that HM Revenue & Customs is losing as a result of inefficient debt management systems is much higher than the £17bn stated yesterday in the Public Accounts Committee report, according to PFK. Referring to a 'tax gap', PFK tax investigations partner, John Cassidy, said there are 'a lot more' unpaid taxes which HMRC is not pursuing. In 2003/04 the tax gap was estimated to be between £11bn and £41bn. PKF believes this figure will be much higher now due to job cuts. Said Cassidy: 'There are numerous other estimates covering additional taxes, such as duty on cigarettes, and it is impossible to tell the exact amount, as is evident from the huge width of the estimate. However, even if it is in the middle of the range at £26bn, this is an astonishing amount of money.' Yesterday HMRC was criticised for its failed systems which do not automatically link debts owed on different taxes by the same taxpayer. The department was urged by committee chairman Edward Leigh MP to become more efficient in collecting tax.
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