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UK tax gap 'could be £40 billion'

The British economy could be losing £40 billion per year through tax avoidance, a new report suggests.

According to data from HM Revenue and Customs (HMRC), the 'tax gap' for 2005 stood at between £10 billion and £40 billion.

In a statement on its website, the tax body admitted that there was a "wide margin of error" on the true figure.

Commenting on the HMRC figures, general secretary at the Trades Union Congress Brendan Barber suggested that many consumer personal finance worries could be addressed if the tax gap was closed.

"It still leaves huge amounts of unpaid tax by the super-rich - enough to cut taxes for ordinary people, boost public services and do far more to tackle child poverty than the limited measures in yesterday's budget," he told the Guardian.

"The government has been hit by concerted lobbying by non-doms and the super-rich, who describe even the mildest attempt to make them pay a fair share of tax as a prelude to the sky falling in on national prosperity."

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