TAX crimes cost the UK economy nine times more than benefit fraud – but residents are 23 times more likely to be prosecuted for the latter.
Stunning new figures from the TaxWatch think tank revealed that between 2009 and 2019, 23 benefit claimants were prosecuted for every tax fraudster prosecuted.
This comes despite tax fraud costing the Treasury an estimated £20 billion in 2018/19, compared to benefit fraud costing £2.2bn.
The report found that the Department for Work and Pensions also employs three and a half times more compliance staff than the HMRC. Its latest annual report showed the department concluded 46,000 fraud investigations, and referred 2000 for criminal prosecution.
Over the past 11 years, eight and a half times more prison sentences have been imposed for benefits crimes than tax crimes.
A Freedom of Information request by the think tank found that the HMRC is now prosecuting 39% fewer people for tax crimes than it was six years ago, despite the number of criminal investigations into serious and complex tax crime actually rising between 2015 and 2020.
The UK Government and media’s focus on benefit fraud is helping to distract the public on the “massive government losses to white-collar criminality dwarfing the ‘benefit theft’ figure”, according to political scientist Adam Taylor.
George Turner, TaxWatch’s executive director, commented: “The current system, which ends up jailing thousands of benefits claimants whilst tax fraudsters walk free, cannot be justified if we are to have equality before the law.
“But the truth is that if HMRC went after tax fraudsters in the same way that the DWP go after benefits crime, the criminal justice system would collapse…
“It makes absolutely no sense to prioritise the enforcement of benefits crime over tax crime when the amount of money lost to the Treasury from tax fraud is huge compared to benefits fraud.”
HMRC said since it launched its Fraud Investigation Service in 2016 it has “launched over 76,000 civil cases and more than 4000 criminal investigations”.
The official policy is to deal with fraud as a civil matter while keeping criminal investigations for cases where it is necessary to “send a deterrent message” or only a “criminal sanction is appropriate”.
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