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Fact check: £5.5 billion every year in tax avoidance in the UK.
1. Summary of the results
The original statement claiming £5.5 billion in annual tax avoidance in the UK is significantly inaccurate according to multiple sources. HMRC statistics show that tax avoidance specifically amounts to £1.8 billion for the 2022-2023 tax year [1] [2], with approximately £0.5 billion related to marketed avoidance schemes [1]. This figure represents just 0.2% of total theoretical tax liability [2].
2. Missing context/alternative viewpoints
The original statement fails to distinguish between different types of tax gaps. The total tax gap for 2022-2023 is actually £39.8 billion, which represents 4.8% of total theoretical tax liabilities [3] [3]. This larger figure includes various categories beyond just tax avoidance [4]. It's crucial to understand that tax avoidance is just one small component of the overall tax gap.
Furthermore, these figures should be treated with some caution, as tax gap estimates are inherently imperfect and subject to change [5]. Different sources provide slightly varying figures, with some putting tax avoidance around £1.5 billion [5], showing the complexity of measuring these figures precisely.
3. Potential misinformation/bias in the original statement
The original statement appears to conflate different types of tax losses, potentially misleading the public about the scale of tax avoidance specifically. This could benefit:
- Political actors who might use inflated figures to argue for stricter tax regulations
- Anti-tax avoidance campaigners who might benefit from presenting the problem as larger than it actually is
- Media outlets seeking attention-grabbing headlines by using the larger total tax gap figure instead of the specific avoidance figure
The statement's use of the larger figure without proper context obscures the fact that tax avoidance represents a relatively small portion (0.2%) of the total theoretical tax liability [2], which could lead to misguided policy responses or public understanding of the issue.