Tax dodge by self-employed

SIX in ten self-employed workers are failing to pay the full amount of tax they owe, according to an influential think-tank.

The Institute for Fiscal Studies also said more than half of all taxpayers in the construction, hospitality and transport industries under-report their income – including many taxi drivers and bed and breakfast owners.

It came as HMRC said that £34bn of taxes were unpaid in 2015-16 by businesses and individuals.

This so-called tax gap – the difference between what is supposed to be collected and what comes in – was 6pc of the total owed. People filling in self-assessment tax forms accounted for around 20pc of the total.

Many under-payments were reported to be accidental, and most bills were less than £1,000.