Taxman misses out on £27.4bn, claims report

THE TAXMAN has lost out on £27.4bn of tax in the past five years, according to a new report.

The report identified that HMRC missed out on £5.9bn in 2010-11, the Taxpayers' Alliance-Institute of Directors report found.

The study collated data around write-offs and debts deemed not worth pursuing on the grounds of value for money or official error.

"Taxes are a challenge to administer and a burden on families and we need systematic reform to produce a simpler tax code," said Matthew Elliott, chief executive of the Taxpayers' Alliance.

"Some of this uncollected tax will be down to the recession but there is clearly a long-term problem as well. Tax shouldn't be so taxing that even HMRC can't keep on top of it."

An HMRC spokesman said: "HMRC has not given up any tax that is legally owed and collects 99% of debt that is due. 90% of money owed to HMRC that is written off is caused by company liquidations and HMRC is legally barred from collecting that debt.

"However, the amount of remissions and write offs have fallen by nearly £2bn over the last year. Tax write-offs have nothing to do with errors in the tax system, they are mainly due to insolvency and other situations where it is not possible to pursue the debt."