It can be difficult to make sense of the statistics produced by HMRC on the amount of tax at risk from tax evasion and tax avoidance. This year the estimates produced by HMRC of the tax gap (difference between the tax that should be paid assuming 100% compliance and the amount actually paid) suggested that avoidance accounted for £5bn and evasion £26bn.

However, the estimate for tax evasion was not what it seemed since it comprised amounts relating to what was described as ‘legal interpretation’. In other words, everyday disagreements between taxpayers and HMRC as to what the law actually means.

It is slightly alarming that the interpretation of the law should be included in the same category as evasion. Despite this, the announcements by chief secretary Danny Alexander at the Liberal Democrat conference made it clear that there will be no let- up in the government’s ‘war’ on tax evasion and avoidance: the number of inspectors allocated to the Liechtenstein Disclosure Facility (LDF) is to be doubled and HMRC’s affluent units will cast a much wider net in their trawl for unpaid tax.

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