Future Forum | Bank of England

What is the real cost to the country from Tax Evasion.

Ian Collier
Ian Collier | 3 months ago | in Money, Money, Money

HMRC in its report "Measuring The Tax Gap" suggests that the tax gap is £33bn of which £5.3bn is from evasion and another £3.2bn from the hidden economy.

Whilst I admire the work done by HMRC, I am staggered that they believe that the hidden economy hides such little tax lost.  I wonder what percentage of readers have never evaded tax in some way by paying in cash. It would just seem to me that the hidden economy is so much larger than HMRC are suggesting. What do readers think?

Also, analysis from McKinsey suggests that the total cost to the UK economy is of the order of 0.45% of GDP. That would be a sum of about £8bn.  Do readers think this sounds credible?

Illegal immigration and "modern day slavery" are fuelled by the use of cash.  Do readers believe that a cashless society would have an impact in reducing both of these social problems?

Do readers think that a cashless society would reduce crime?

edited on Nov 13, 2018 by Ian Collier

Shelley (BoE Moderator) 3 months ago

Thank you for your post. Interested in others thoughts on this.

Amy Buckingham 1 month ago

This idea has been advanced to the current phase