Britain 'lost' £35bn in uncollected taxes last year (But can one lose what was never theirs?)

Britain lost £35bn in uncollected taxes last year - the equivalent of 7.9pc of the annual revenue, the Treasury has admitted.

The so-called ‘tax gap’, which is the difference between the amount of tax due and the total collected, was reduced from 8.1pc of revenues from the year before but critics argue that the figure is still too high.

The Coalition has pledged to make tax collection more efficient by simplifying the system and clamping down on tax evasion. Last year in the Spending Review George Osborne allocated £917m of funding to HM Revenue & Customs to tackle the tax gap and raise revenues of £7bn a year by 2014/15.

David Gauke, Exchequer Secretary to the Treasury, said: ‘Although these numbers show continued progress by HMRC in reducing the tax gap, there is no room for complacency. Just in the last few weeks we have challenged offshore tax evaders, closed tax avoidance loopholes and created a new HMRC unit to ensure that the wealthier members of society pay their share.”

He added: “We will continue to take action to prevent a minority of rule breakers dodging their responsibility to pay the right tax at the right time.”

Dave Harnett, HMRC permanent secretary for tax, said: “The tax gap is the result of a wide range of behaviours and the challenges are constantly changing, but these figures show we are continuing to tackle non-compliance. more