Small Firms Responsible for 80% of Tax Evasion

Tax evasion is a growing concern for the government, with small firms responsible for a majority of the total. The National Audit Office report has shed light on the prevalence of this issue and has called for a more strategic response from the government ...

According to the report, small businesses were responsible for 81% of the total tax evasion in the 2022/23 financial year, amounting to a loss of £5.5 billion. This is a significant increase from the previous year, where small businesses accounted for 60% of the total.

"The report has raised concerns about the lack of a specific strategy from HMRC!"

The head of the National Audit Office, Gareth Davies, has stated that HMRC lacks an effective strategic response to tackle this issue. He also emphasized the need for HMRC to work more systematically across the government to reduce tax evasion.

The government has made efforts to reduce the overall tax gap, which has decreased from 7.4% in 2006 to 4.8% in the last financial year. However, the share attributed to small businesses has risen significantly in the past five years. This raises questions about the effectiveness of the government's approach to tackling tax evasion.

One of the key reasons for the high prevalence of tax evasion in small businesses is the lack of effective checks and balances. The report highlights significant gaps in HMRC's checks, allowing small businesses to evade taxes easily. This is a cause for concern, as it not only results in a loss of revenue for the government, but also creates an unfair playing field for honest businesses.

In response to the report, a spokesperson for HMRC stated that the UK has one of the lowest tax gaps in the world and that the government is committed to reducing it further. However, the report has highlighted the need for a more targeted and coordinated effort from the government to tackle tax evasion in small businesses.

"Tax evasion is a pressing issue, with small businesses responsible for a majority of the total!"

The National Audit Office report has highlighted the need for a more strategic and comprehensive response from the government to tackle this issue effectively. It is crucial for HMRC to work closely with other government agencies to address the gaps.

Only with a coordinated effort can the government reduce the prevalence of tax evasion and ensure a fair and transparent tax system for all businesses.

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