The Chancellor’s recent song and dance about an increased crackdown on tax avoidance looks to be based on “dodgy statistics”, according to The Independent.
Osborne had claimed that the current government managed to bring in £100bn from tax dodgers in comparison to £52bn by the previous one. This is due to HMRC using a new recovery method not employed in the last election cycle.
While this sounds like incredible progress, HMRC made a change to their accounting methods. This meant that the £100bn figure now included “revenue protected figures” as well. That, in essence, is imaginary money.
“Revenue protected figures” is what the taxman predicts someone will pay once they’re caught and start sticking to the rules. In other words, the amount is not set in stone and has yet to go anywhere near HMRC.
With this in mind, only 40% of the money claimed by the government to be raked in during the 2012/13 tax year was actually collected from anyone. The remaining 60% falls under the “revenue protected” prediction.
Therefore, Osborne has brought in around £40bn from tax avoiders last year, meaning a decrease in comparison to the previous government.
Shabana Mahmood, the shadow exchequer secretary to the Treasury, said: “Osborne has been caught using smoke and mirrors to try and hide his failure to tackle tax avoidance. While ordinary families are facing a cost-of-living crisis and deficit is still high the amount of uncollected tax actually rose last year.”