Closing the tax gap is alternative to Child Benefit change, says union

8 October 2010
For immediate release

Closing the tax gap is alternative to Child Benefit change, says union

Responding to the Government's recent announcement that Child Benefit is to be withdrawn from higher rate taxpayers in order to save £1 billion a year from 2013, the Association of Revenue and Customs (ARC) today said there is another way to defeat the deficit - through attacking the tax gap. ARC is the union representing senior staff in HM Revenue and Customs.

ARC President Graham Black said:

"Figures provided by HMRC demonstrate that the tax gap is more than £50 billion each year. The amount saved though the proposed change to Child Benefit is less than 2% of the amount tax cheats get away with each year.

"ARC is urging the Government to invest in more senior tax professionals so that the tax gap can be closed. The recent announcement of a £900 million investment through to 2015 is welcome but does not go nearly far enough. It will not, for example, tackle the large corporates who seek to cheat on their taxes to the tune of more than £10 billion each year. The investment of £900 million, or £225 million a year, will bring in an additional £7 billion a year by 2015. With more investment much more could be done."

Last year ARC members brought in the lion's share of the £12 billion recovered from tax cheats. This work is highly cost effective with recovery ranging from 30 to 180 times the cost of salaries.

Black said: "An additional 50 senior tax professionals could expect to recover the same amount as will be saved through the change to Child Benefit that will affect more than one million middle income families in the UK.

"ARC urges the Government to be bold and defeat the deficit through investing in senior tax professionals."

Notes for editors

1. The tax gap is the difference between the tax that should be paid under the laws passed by Parliament and the amount actually paid. The tax gap represents almost one third of the budget deficit. A significant proportion of the tax gap relates to wealthy individuals and large companies who seek to avoid paying their fair share of taxes. The tax avoided by cheats means that honest taxpayers pay more and suffer from bigger cuts to benefits and vital public services.
2. ARC (the Association of Revenue and Customs) represents senior tax professionals working in HMRC. ARC members are the tax inspectors, lawyers, accountants, managers and other senior professionals who combat top-end tax avoidance and evasion. Even at the lower end of this scale an ARC member earning £50,000 could expect to recover £1.5m - enough to pay for 50 nurses or all the teachers in a medium-sized school.
3. ARC is a section of the FDA - the trade union and professional body representing 18,000 of the UK's senior civil and public servants. Our members include policy advisors, senior managers, tax inspectors, economists, statisticians, accountants, special advisers, government lawyers, diplomats, crown prosecutors and NHS managers.
4. The FDA (formerly the First Division Association) should be referred to simply as "The FDA" and can be described as "the senior public servants' union".
5. For further information contact:

• Graham Black, ARC President, tel: 020 7401 5559 or 07766 497976.
• Debbie Stamper, ARC officer, tel: 020 7401 5555.
• Graham Flew, ARC officer, tel: 020 7401 5555.