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Tackling tax fraud: how HMRC responds to tax evasion, the hidden economy and criminal attacks inquiry


HMRC estimates that losses to tax fraud amount to £16 billion each year. This is nearly half of HMRC's estimate of the tax gap (£34 billion): the difference between the amount of tax HMRC should collect each year and the amount it actually collects.

Reducing the amount of tax that is lost due to tax fraud is a high priority for HMRC. To do this it needs to make better use of its data and develop its analysis. HMRC has only partial data on how much of the total yield is derived from its work to counter tax fraud. For example it has more complete information on its work to tackle organised crime than tax evasion.

This inquiry assesses HMRC's performance in tackling different types of tax fraud—its use of prosecutions, how it assesses risk and uses data, and its shifting strategy to place more emphasis on measures to prevent losses rather than relying so much on investigating them afterwards.

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