Written question asked by Lord Jacobs (Non-affiliated), in the House of Lords. It was answered by Lord Sassoon (Conservative) on Monday, 21 November 2011.

Taxation: Avoidance

Question: To ask Her Majesty’s Government what proportion of the £35 billion in taxes which they estimate is lost to the United Kingdom each year results from (a) illegal tax evasion, and (b) legal tax avoidance.

Answer: The latest tax gap estimates were published in September 2011 in Measuring Tax Gaps 2011 on HMRC's website at: http://www.hmrc.gov.uk/stats/mtg-2011.pdf. This publication contains an illustrative breakdown of the tax gap by taxpayer behaviour for 2009-10. It estimates that the tax gap from evasion was around £4 billion, equivalent to 12 per cent of the total tax gap, with a further £4 billion from the hidden economy. The tax gap from avoidance was estimated to be around £5 billion, 14 per cent of the total gap.

Secondary information