Tackling tax dodging on the UK’s high streets to be investigated by MPs
The Treasury Committee will examine tax evasion, business rates avoidance, and dodging tobacco and vapes duty on the UK’s high streets.
Meeting details
The National Crime Agency estimates that £12 billion of criminal cash is generated in the UK each year. At least £1 billion of that is thought to be laundered through high street stores connected to the sale of fake goods, tax evasion, illegal working and illicit tobacco and vape sales.
MPs are likely to explore the challenges HMRC faces in tackling these issues, as well as the likely impact of around £1.7 billion of funding for HMRC to close the tax gap.
The 2024-25 tax gap figures released last week show an increase of £6.4 billion, from 6.0% to 6.4% of total liabilities. This is despite the Government’s repeated efforts to close the tax gap. It is estimated that tax evasion by small businesses increased from £3.1 billion in 2019-20 to £4.4 billion in 2022-23. MPs could explore the potential driving factors of this increase, as well as other forms of tax non-compliance.
The Committee may choose to examine the tax losses resulting from the practice of ‘phoenixing’, which HMRC estimated accounted for around £1.6 billion in tax losses in 2022-23. MPs are also likely to consider the impact of illicit sales of tobacco and vapes, and long-term shop vacancies on the UK’s high streets.