Which costs more? Tax evasion or Benefit Fraud?

[Stuart]

The answer might surprise you.. http://www.guardian.co.uk/commentisf...-tax-avoidance

Now, I know the source is a left-wing newspaper, but it does make some interesting points.

Successive governments (from ALL parties) have been telling us that millions of people are abusing their benefits, and making loud noises about reducing that fraud while seemingly ignoring the evasion (both legal and illegal) that happens at the other end of the scale.

According to the DWP's official estimates, welfare fraud is currently around £1.2billion a year. Compare this to the fact that even the most conservative estimate places tax evasion at about £5bn a year. Also consider the fact that HMRC estimates that the gap between what it is paid and what it thinks it is owed is £30bn.

Personally, I think the Government needs to take a long, hard look at both the Welfare system and the Tax system. They are both bloated and overcomplicated. Something which leaves them both open to abuse.

Unfortunately, I doubt it will ever happen. To many MPs appear to be taking advantage of the loopholes to reduce their own tax bills.

Originally Posted by Stuart

The answer might surprise you.. http://www.guardian.co.uk/commentisf...-tax-avoidance

Now, I know the source is a left-wing newspaper, but it does make some interesting points.

Successive governments (from ALL parties) have been telling us that millions of people are abusing their benefits, and making loud noises about reducing that fraud while seemingly ignoring the evasion (both legal and illegal) that happens at the other end of the scale.

According to the DWP's official estimates, welfare fraud is currently around £1.2billion a year. Compare this to the fact that even the most conservative estimate places tax evasion at about £5bn a year. Also consider the fact that HMRC estimates that the gap between what it is paid and what it thinks it is owed is £30bn.

Personally, I think the Government needs to take a long, hard look at both the Welfare system and the Tax system. They are both bloated and overcomplicated. Something which leaves them both open to abuse.

Unfortunately, I doubt it will ever happen. To many MPs appear to be taking advantage of the loopholes to reduce their own tax bills.

These figures are on the forum somewhere I know I have used the fraud figure before. Tax Avoidance ( evasion is illegal) should have all its loopholes closed and it should be done now without debate its a no brainer

[Sirius]

Originally Posted by tizmeinnit

These figures are on the forum somewhere I know I have used the fraud figure before. Tax Avoidance ( evasion is illegal) should have all its loopholes closed and it should be done now without debate its a no brainer

Never going to happen as MP's use it to protect there money.

[denphone]

Originally Posted by Sirius

Never going to happen as MP's use it to protect there money.

And with many of them millionaires they have got plenty of that.

What will happen re the tax loopholes is that they will never be closed ,instead HMRC will investigate fully and eventually catch a few that are using loopholes illegally but the investigations will take so long and cost so much as to negate any benefit in the investigation

[BenMcr]

Originally Posted by Stuart

The answer might surprise you.. http://www.guardian.co.uk/commentisf...-tax-avoidance

Not if you read Private Eye - they've been going on about this for a while now

[mertle]

I was reading the other day of serious system which agressively tax issue with netherlands.

That this one needs to be stopped.

http://www.guardian.co.uk/business/2...ms-going-dutch

I also was reading that 4 main tax companies denying helping businesses aggressive tax avoidance schemes.

http://www.telegraph.co.uk/finance/9...t-Britain.html

Now dont deny companies employ clever people but cant get my head around the denial. So who is advicing and enacting these aggressive tax avoidance schemes if the big 4 angels.

Should we go further as something stinks high evans.

[danielf]

Originally Posted by mertle

I was reading the other day of serious system which agressively tax issue with netherlands.

That this one needs to be stopped.

http://www.guardian.co.uk/business/2...ms-going-dutch

I think that particular one is unlikely to continue much longer.

http://arstechnica.com/business/2013...n-tax-evasion/

[mertle]

Originally Posted by danielf

I think that particular one is unlikely to continue much longer.

http://arstechnica.com/business/2013...n-tax-evasion/

Good news on that if its closed.

[Osem]

This is why we need a simpler tax system. Easier to follow, easier to police and easier to enforce with any 'acceptable'* forms of avoidance (as opposed to evasion which is already illegal) and reliefs unequivocally defined.

There's also the question of which (benefit fraud or tax evasion/avoidance) is easier to control/enforce. Unpalatable as it is, rich people and companies can currently construct and complicate their activities to take full advantage of any loopholes and it's incredibly time consuming and expensive to unravel them. This means that any savings made in recovered tax have to be offset against the costs and there's always the possibility that HMRC will lose in court and the taxpayer have to foot the bill.

A simpler benefits system would help reduce fraud and confirm/deny entitlement and that's what's currently being worked upon isn't it?

* e.g. ISA's & pension tax relief designed to encourage saving.

Originally Posted by Osem

This is why we need a simpler tax system. Easier to follow, easier to police and easier to enforce with any 'acceptable'* forms of avoidance (as opposed to evasion which is already illegal) and reliefs unequivocally defined.

There's also the question of which (benefit fraud or tax evasion/avoidance) is easier to control/enforce. Unpalatable as it is, rich people and companies can currently construct and complicate their activities to take full advantage of any loopholes and it's incredibly time consuming and expensive to unravel them. This means that any savings made in recovered tax have to be offset against the costs and there's always the possibility that HMRC will lose in court and the taxpayer have to foot the bill.

A simpler benefits system would help reduce fraud and confirm/deny entitlement and that's what's currently being worked upon isn't it?

* e.g. ISA's & pension tax relief designed to encourage saving.

I'll save when the interest rates are far better than at present.

[Osem]

Originally Posted by Maggy J

I'll save when the interest rates are far better than at present.

Well if you want to talk about the other big losers in this mess then savers would be them for sure! They did the 'prudent' thing and have been 'rewarded' with pathetic interest rates. For the elderly especially, that creates the very real problem of rapidly diminishing capital.