| By :
Mark Jenner
The problem of fraud is massive globally. It is a hidden crime and the true extent is not fully understood. Reports put the level of fraud in the UK at differing levels as a result. If you consider tax fraud alone the estimates of how much is being evaded are unlikely to be accurate. In the UK a report in 2010 by the National Fraud Authority puts the level of tax fraud alone at £15.2 billion. This is less than 3 percent of the total annual revenue from tax collected in the UK. This is unlikely to fully take into account the systematic evasion of tax by the black economy. Consider the hundreds of thousands of small businesses that deal in cash and under declare their earnings. If you are sceptical try visiting a small independant shop. A small newsagents or coffee shop will do. When you pay the vendor for your coffee or chewing gum, keep an eye out on how he puts the money away. For every sale that is rung into the till there will be one that is simply placed into the already open drawer. Consider the times that a tradesman has offered a cash discount. Is there any other reason for doing this than wanting to keep the cash away from his official record of earnings? Another example of tax evasion is the use by small businesses of self employed staff. For example there are many marketing businesses set up to promote advertisements in various publications, on web sites and on bill boards. They will use teams of tele-sales operatives who work for themselves on a commission basis. They are responsible for their own tax. Frequently these workers do not declare their earnings and some even claim benefits as well. The owners of these businesses turn a blind eye in many cases, and even see the opportunity to evade tax themselves. By putting down a false name or two on the sales list they can draw extra money out of the business apparently as a legitimate cost to pay sales workers but actually take the money tax-free themselves. The construction industry had this problem until the Revenue brought in laws stopping sub contractors being paid without tax being first deducted unless they were properly certified. However, the practice still exists in many other areas. Tax evasion is endemic in most countries including the UK. If the amount evaded is much more than 3 percent as this article suggests then it is true that we are all paying much more tax than we should.
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