The amount of money lost to the government through tax avoidance, evasion or uncollected tax exceeds £120 billion according to a report by tax expert Richard Murphy.
The report for the Public and Commercial Services Union (PCS) makes the case for additional resources in Her Majesty’s Revenue and Customs (HMRC) to close the £120 billion plus tax gap.
The report, being launched at a tax justice seminar in parliament today, argues for a reversal of job cuts totalling 25, 000 and a rethink on the closure of 200 tax offices across the UK to tackle the missing billions.
In his report, Richard Murphy from the Tax Justice Network makes the following points:
“Recruiting new staff to HMRC has a very low real cost to the government at this time: every new member of staff does, eventually, mean another person leaves the unemployment register. When the tax the new employee pays and the cost of benefits saved is taken into account the real cost to the government of employing a person on £25, 000 a year at HM Revenue & Customs may be as low as £3, 700 a year until the time that full employment is reached.
The savings from closing local tax offices may be illusory. Over 70% of all HM Revenue & Customs offices are subject to PFI deals that mean unless they can be sub-let (which is almost impossible at present) no savings accrue to HM Revenue & Customs from office closures.
In combination this means that the real cost of reversing current HM Revenue & Customs policy is very low, whilst the yield, if additional staff were only dedicated to collecting tax owing, might be as high as £12 billion a year * an invaluable contribution to saving the tax gap and enough to ensure that around the country class sizes can be maintained, health services will still be available, pensions can be protected and other essential public services need not be cut. If aimed at tax evasion and avoidance the yield might be higher still.”
The full report can be viewed on the PCS website via this link: www.pcs.org.uk/taxjusticedoc
The report comes a day after a strongly supported 48 hour strike by civil and public servants which saw 80% of revenue staff walk out in a dispute of cuts to redundancy terms.
Commenting, Mark Serwotka, PCS general secretary, said: “All the main political parties are talking about public sector cuts to deal with the public deficit when they should be talking more about tax. It is the economics of the madhouse to be closing offices and cutting HMRC staff when they could be tackling the tax gap and closing the public deficit. As the government tears up civil and public servants’ contracts to cut them on the cheap, this report highlights that there is another way and puts the business case for investing in HMRC rather than crude cuts.”