CIOT: Tax gap estimates show extent of criminal activity
The Chartered Institute of Taxation has commented on the Government’s new estimates of the ‘tax gap’, published today.
Gary Ashford, who represents the CIOT on the Government’s Compliance Reform Forum, commented:
“While some will challenge these figures, provided they are calculated on consistent bases, they are a useful contribution to the tax debate. The results suggest that recent government initiatives are having an effect.
“According to the government, tax evasion and other illegal activity are costing the Exchequer three times as much as tax avoidance. The CIOT has long argued that HMRC needs to put more effort into investigating and prosecuting those who seek to evade tax. We support recent announcements of additional resources in this direction.”
The tax gap figures show some £6 billion a year being lost to errors and carelessness by taxpayers. The CIOT believes that this is an area where professional tax advice is part of the solution. Tax advisers support their clients in keeping good records and producing accurate tax returns.
Gary Ashford continued:
“Of course errors can go both ways. It is unclear whether these estimates take into account the amounts that some taxpayers will be overpaying by not taking advantage of reliefs and exemptions they are entitled to.
“It is not only taxpayers who make mistakes. As the recent Treasury Committee report illustrated, HMRC’s own systems are prone to error and make the task faced by taxpayers needlessly difficult. If HMRC want to improve compliance and reduce error levels they also need to make it easier for people to contact them and get advice that is prompt, accurate and understandable.”
Notes to Editors
1. The government document, ‘Measuring Tax Gaps 2011’, is available at http://www.hmrc.gov.uk/stats/measuring-tax-gaps.htm
2. The Chartered Institute of Taxation (CIOT) is a charity and the leading professional body in the United Kingdom concerned solely with taxation. The CIOT’s primary purpose is to promote education and study of the administration and practice of taxation. One of the key aims is to achieve a better, more efficient, tax system for all affected by it – taxpayers, advisers and the authorities.
The CIOT’s comments and recommendations on tax issues are made solely in order to achieve its primary purpose: it is politically neutral in its work. The CIOT will seek to draw on its members’ experience in private practice, government, commerce and industry and academia to argue and explain how public policy objectives (to the extent that these are clearly stated or can be discerned) can most effectively be achieved.
The CIOT’s 15,600 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’.
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George Crozier
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The Chartered Institute of Taxation
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The Association of Taxation Technicians
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