Let's crack down on real welfare cheats- wealthy tax evaders
9 August 2010
Katherine Trebeck of our UK Poverty team posts:
Benefit cheats are held up as scroungers - with the BBC even running a story about a man in a jive-dancing competition claiming disability benefits for an arthritic hip.
But for each of these very public cases of benefit fraud (reported with great vitriol), there are many, many more of fraud and evasion by companies, business owners and wealthy individuals against the tax system. We just don't hear about it - it seems to be 'don't know, don't care'.
But we should care about corporate welfare cheats, and they should be treated with the same public humiliation we reserve for benefit cheats. We should care because it is estimated that the total tax gap is about £120 billion (Richard Murphy)
Admittedly, maybe predictably, the government's figure is closer to £40 billion. Just think where that could be spent in these straightened times. This £120 billion would be a nice chunk out of the public debt wouldn't it?
In contrast, benefit fraud and official error combined cost £3.1 billion last year. That is, not benefit fraud alone, but also official error - the presence of which demonstrates the complexity of the system that keeps many from claiming their entitlements.
Yet, the government hardly pursues this £120 billion, while it harangues, stigmatises and condemns so-called benefit cheats. A recent answer to a Parliamentary Question (from Katy Clark MP) revealed that:
'HM Revenue and Customs spent £633,284 (excluding VAT) on advertising for the purposes of preventing tax evasion last year. There was no expenditure in the previous two years'.
In the same period, £17.5 million was devoted to tackling benefit fraud. That's more than a thousand times as much spent for every pound we stand to gain.
To me, this skewed government effort in enforcing the two different types of cheating, despite their seriously different magnitudes, is made worse because it comes at a time of public sector cuts.
It angers me that the media chastise individuals caught committing benefit fraud, while portraying those who escape paying their full tax obligations as either efficient businesses or akin to a naughty younger brother who got caught raiding Dad's drinks cabinet... surely it is time we re-think who we are chasing and calling names?
Incidently, Schweppes have a lovely take on the hypocrisy of the state's disproportionate efforts in catching benefit cheats. View the ad here.





















