Clawing back lost taxes would fund help amid cost of living crisis

THE Government says it can’t spend its way out of the cost of living crisis.

Fuel costs have increased by 54 per cent and inflation (CPI) is at 10.9 per cent. And for the less well off, CPI does not include housing costs. We all buy in the RPI, currently at 13 per cent. The Government uses CPI to save money and RPI to raise money, eg utilities and rail fares

VAT last year was £130bn. With the price of all goods and services increasing, the Chancellor has a windfall VAT increase.

He has also frozen personal tax allowances until 2025. This will raise an extra £19bn. The

Chancellor has enough money to help in the cost of living crisis.

Disposable income is now the lowest since 1955. In addition to inflation, the taxpayer has a double whammy, increased tax burden. Now Mr Sunak is proposing reducing tax to businesses.

In addition, the money lost by the “chumocracy” in the pandemic amounts to £59.16bn and £5bn of fraudulent furlough claims. The Treasury has written this loss down.

At the same time the DWP is employing 2,000 extra staff to clamp down on benefit fraud. That is no way near the £5bn they have lost to their pals.

Lord Theodore Agnew, minister for counterfraud, resigned from the Government having concern that the Treasury was sleepwalking in dealing with the £29bn annual cost of fraud to the taxpayer.

He also said that “the treasury had no knowledge of, nor little interest in, the consequences of fraud to our economy or society”.

He went on to say that the Government’s record on fraud was characterised by “arrogance, indolence and ignorance”.

Tax evasion amounts to £236bn a year. Evaders hid behind nominee directors, the true owners are hidden. The Government has shown that it has the tools to stem the flow of dirty money but has failed to use this to fight against financial corruption and tax evasion.

In the previous coalition government, Business Secretary Vince Cable decided to make creating a company as easy as possible and removed all limits on who could enter data into the website used to access Companies House.

Previously the portal had only been available to accredited agents. Now anyone in the world with access to the website can create a company with no checks of any kind. Unsurprisingly, they did.

The Government is not interested in checking the credentials of the hundreds of thousands of companies created in the UK each year. The treasury minister at that time said to a select committee who wanted Company House to do checks on company formation:

“The impact on resources to carry out due diligence on that number of companies would be considerable. The overall cost to the UK economy could run into hundreds of millions of pounds each year.”

The National Crime Agency at that time estimated cost of fraud from dodgy companies was £190bn in 2016.

John O’mullane, Hull.