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Tax Dodging Brits Fuelling Black Economy

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  • Tax Dodging Brits Fuelling Black Economy

    One in four Britons has paid cash for a product or service during the past year to avoid paying tax - collectively contributing £6.6bn to the black economy, it is claimed.

    A quarter of people said they had paid out an average of £552 each during the past 12 months to people such as builders to dodge VAT, according to independent financial adviser website Unbiased.co.uk.

    But the group said despite them taking steps to avoid paying this tax, adults collectively paid £9.3bn too much tax last year.

    It pointed out they failed to take advantage of the tax credits and tax-free allowances offered by the Government.

    Chief executive David Elms said: "It is staggering that one in four UK consumers will happily save themselves an average of £97 in tax by paying for services in cash, thus avoiding VAT, but continue to waste an average of £290 per year in unnecessary tax payments.

    "Our TaxAction report is now in its 16th year but the total level of waste continues to rise."

    A HM Revenue & Customs spokeswoman said: "As the report says, there are many legitimate ways such as tax credits and tax free allowances to increase household income and boost personal finances.

    "Tax evasion is a criminal offence and deprives the UK's public services of vital resources.

    Since its inception our evasion hotline has handled over 200,000 calls, providing us with information about tax evaders.

    "Tax cheats face paying back taxes, penalties of up to 100% of the tax evaded together with interest charges and in the most serious cases criminal prosecution and imprisonment.

    "Tax evasion isn't worth the risk."

    Paying Cash To Avoid Tax Fuels Black Economy By £6.6bn |Sky News|Business

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