HC Deb 06 March 2002 vol 381 c397W
Mr. Wood

To ask the Chancellor of the Exchequer how much revenue the Treasury estimates has been lost each year since 1997 through(a) income tax evasion, (b) VAT evasion, (c) non-payment of national insurance contributions and (d) benefit fraud. [36075]

Dawn Primarolo

There is no reliable measure of the total income tax and national insurance contributions lost to evasion. In his report, published in March 2002, Lord Grabiner QC commented on the scale of the hidden economy and saidBy its nature, the size of the informal economy is hard to measure. Most estimates are based on analysing high-level economic aggregates, such as labour market statistics or income and expenditure surveys, and calculate the result as a percentage of GDP. However there is research which suggests that these estimates tend to be exaggerated. It would be impractical to arrive at a precise and meaningful figure as to the scale of the problem without a considerable investment of time and resources.

There are no revenue estimates for all VAT evasion since 1997. However, estimates for VAT Missing Trader Fraud have been published and I refer the hon. Gentleman to page 19 of the Customs and Excise paper "Measuring Indirect Tax Fraud" that was published on 27 November 2001 a copy of which is in the Library of the House. This gives estimates for this type of VAT fraud for 1999–2000 and 2000–01. There are no estimates for any earlier years. The most recent estimate of the annual loss to benefit fraud is £2 billion.

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