HMRC is missing at least £40 billion in unpaid tax, known as the ‘tax gap’, which is the difference between the amount of tax owed and what the government collects.
This is unacceptable at a time when health services and public services are on the brink of collapse due to underfunding.
The tax gap has increased in real terms to £40 billion from £36 billion in 2021-22, which is an eye-watering sum of money and an underestimate as it doesn’t include money that wealthy companies shift offshore.
To put £40 billion in context, it’s enough to cover government spending on the police or nearly half the money spent on schools.
The Parliament’s Public Accounts Committee has criticized the government last year for underfunding HMRC and insisted that more money must be invested into tax investigations.
With more resources and investment, HMRC could have the teeth to claw back more unpaid tax and close the tax gap.
Closing the tax gap by just 10% could cover the cost of ending the two child benefit cap, while closing the tax gap by 20% could pay for around 63,000 nurses, 44,000 teachers, and 41,000 police officers.
Global support for taxing billionaires is growing, with a report calling for a coordinated global minimum tax for billionaires.
Government Ministers in Brazil, France, Spain, South Africa, Belgium, and Colombia have made supportive statements when the idea for a global minimum wealth tax was first announced.
Leading tax economist Gabriel Zucman recommends a 2% minimum tax on the wealth of billionaires, in line with our own proposals for UK-based billionaires.
