2024 Tax Evasion Statistics UK

The following data has been compiled to provide an up-to-date overview of UK tax evasion statistics, covering key figures from recent years and insights into trends, government responses, and notable cases.

Key Tax Evasion Statistics (2023)

• The estimated UK tax gap for 2021-2022 was £36 billion, representing 4.8% of total expected tax revenue (HMRC, June 2023).
• Tax evasion alone accounted for £4.9 billion of the total tax gap in 2021-2022 (HMRC, June 2023).
• 76,000 reports were made to HMRC’s tax evasion hotline between 2022 and 2023, a 4% increase from the previous year.
• VAT evasion remains a significant issue, contributing to £7.9 billion of the total tax gap in 2021-2022 (HMRC, June 2023).

How Many Tax Evasion Cases Occur in the UK Each Year?

In 2021-2022, there were 4,012 recorded tax evasion cases, reflecting a 5% increase from the previous year (HMRC, 2023). Over the past five years, HMRC has investigated more than 15,000 individuals for tax-related offences. While fraud prosecutions have declined since 2019, the number of individuals facing penalties has remained steady.

Tax Evasion Prosecutions & Investigations (2022-2023)

During this period, 540 individuals were charged with tax evasion, while new criminal investigations were launched into 625 individuals. HMRC also investigated 225 businesses and individuals for serious tax evasion. To strengthen enforcement, the UK government pledged an additional £1 billion in funding for HMRC tax compliance efforts from 2022 to 2025, aiming to recover £4.5 billion in lost revenue. High-Profile Tax Evasion Cases

Dominic Chappell (2020 Case)

Former BHS owner Dominic Chappell was sentenced to six years in prison in November 2020 for evading £584,000 in tax. He failed to pay VAT, corporation tax, and income tax on £2.3 million in income from 2015-2016, despite being liable for £351,944 in VAT alone.

Offshore Tax Evasion Crackdowns (2010-2023)

Since 2010, HMRC has recovered over £3.2 billion from offshore tax evasion investigations. The UK government has invested £2.8 billion in offshore tax evasion enforcement since 2010, showing a sustained effort to combat hidden wealth abroad.

The Cost of Tax Evasion in the UK

The estimated UK tax gap for 2021-2022 was £36 billion, an increase from £32 billion in 2019-2020. Tax avoidance and tax evasion together led to £12.4 billion in lost revenue in 2021-2022, with criminal tax evasion alone costing the UK £5.4 billion.

UK Tax Gap Breakdown (2021-2022)

Where is tax lost?

• Small businesses: £14.3 billion
• Large businesses: £6.1 billion
• Criminals: £5.4 billion
• Medium businesses: £4.6 billion
• Individuals: £2.6 billion

Types of tax loss contributing to the gap

• Income Tax, National Insurance, Capital Gains Tax: £12.4 billion
• VAT: £7.9 billion
• Corporation Tax: £5.1 billion
• Excise duties: £2.9 billion
• Other taxes: £1.7 billion

Reasons for tax evasion and avoidance

• Failure to take reasonable care: £6.2 billion
• Criminal attacks: £5.4 billion
• Legal interpretation disputes: £5.0 billion
• Tax evasion: £4.9 billion
• Errors: £3.4 billion
• Hidden economy: £3.1 billion
• Tax avoidance: £1.8 billion

Undeclared Earnings in the UK (2023)

An estimated 6.2 million people in the UK engage in side hustles, with many failing to declare earnings exceeding the £1,000 tax-free threshold. The total amount of untaxed income from undeclared side jobs in 2023 is estimated at £25.7 billion.

Regional Breakdown of Undeclared Earnings

• London: 31.2% of individuals fail to declare side income (average undeclared earnings: £9,120).
• North East: 27.4% (average undeclared earnings: £4,120).
• North West: 13.5% (average undeclared earnings: £3,980).

Gender Breakdown

• 20% of men fail to declare additional income, with an average undeclared amount of £4,890.
• 9.1% of women fail to declare side earnings, with an average undeclared amount of £3,250.

Generational Breakdown

• Millennials (born 1981-1996): 29.1% fail to declare extra income.
• Generation X (born 1965-1980): 15.2% fail to declare additional income.
• Baby Boomers (born 1946-1964): 7.8% fail to declare side earnings.

How Many Tax Fraud Cases Are Reported in the UK?

HMRC’s tax evasion hotline receives approximately 208 calls per day, with 76,000 reports of suspected tax fraud made in 2022-2023—a 4% increase from the previous year.

The UK faces ongoing challenges in addressing tax evasion, with billions lost annually due to undeclared income, VAT fraud, and corporate tax evasion. However, increased funding and enforcement by HMRC have resulted in more investigations and higher revenue recoveries in recent years. Staying informed about tax obligations is essential for individuals and businesses to avoid severe penalties.

For more information on tax evasion laws and legal advice, contact Patrick Cannon.