£42bn lost in unpaid tax ‘black hole’

BILLIONS that could be spent on public services is lost through unpaid tax, MPs say.

Some £ 2billion is outstanding, with around 5 per cent of tax owed each year failing to be collected, the Commons public accounts committee (PAC) found.

The Liberal Democrats called for ‘serious action to close this tax gap black hole’.

In a PAC report published today, MPs criticise ministers for not doing more to claw back the money. HMRC collected £731.1billion in taxes and duties in 2021-22 – the highest on record. But the committee said: ‘In June 2022, £ 2billion was owed to HMRC in tax debt... This debt is now set to fall more slowly than initially expected as taxpayers feel the effects of the cost of living crisis.’

Dame Meg Hillier, committee chairman, called the figures ‘eye-watering’. HMRC said it prioritises collecting unpaid taxes.