The House of Commons Library has published a paper called “Tax Avoidance: recent developments” which considers the issue of tax avoidance in the UK and what is being done to combat it. The paper is 90 pages long, but we’ve found a few interesting quotes and statistics:
- According to a former HMRC Anti-Avoidance Director, a good example of legitimate tax planning is putting cash into an ISA account
- The tax gap stands at £36bn in 2015/16. It reduced as a percentage of total tax liabilities from 8.3% in 2005/06 to 6.5% in 2013/14 (but has since levelled out)
- There has been a large reduction in the PAYE tax gap as a result of, it is claimed, Real Time Information
- Avoidance only accounts for about 6% of the tax gap, compared to 14% for tax evasion and 17% for the hidden economy, the latter including moonlighting and “ghosts” unknown to HMRC
- 36,000 Accelerated Payment Notices were issued in 2015/16, collecting £2.1bn. Of this, only £14m was refunded after legal challenges. Only 282 Follower Notices were issued in the same period but collected more than £200m
- Of the first 46,000 APNs issued, 15,000 representations were made but 89% of the APNs were upheld as valid
- HMRC have a current win rate of 80% of all avoidance cases taken to Court