Tax Rebates & Refunds

Watchdogs claim HMRC has missed tax evasion targets

February 23, 2013
Posted in Other Tax — Written by Geoffrey

According to the National Audit Office, the crackdown on tax evasion by HM Revenue & Customs (HMRC) has missed its target by around £850 million.

HMRC’s two-year campaign to catch tax evaders and recover lost tax involved putting 400 extra staff to work and investing a considerable part of its budge. The aim for 2010/11 was to cut losses caused by tax evasion by around £1.4 billion and halve error and fraud rates from 9 per cent to 5 per cent.

It has now been revealed that in this period, HMRC only managed to reduce the tax evasion total by £300 million and reduce error and fraud rates to 8.1 per cent. However, the department, which is responsible for calculating income tax and processing tax rebates as well as catching tax evaders, did manage to prevent an extra £230 million a year being paid out incorrectly.

Whilst welcoming the department’s innovative approach to cracking down on tax evasion, the National Audit Office has criticised HMRC in a number of other areas. The Office’s Amyas Morse said:

“To tackle error and fraud effectively, there needs to be an improved understanding of risks and better use of information.”

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