The ramifications of Covid run far and wide, even in the world of HMRC.
According to a report by the National Audit Office (NAO), tax non-compliance during the COVID-19 pandemic cost the UK government £9 billion.
The report stated that the HMRC (Her Majesty’s Revenue and Customs) had to redirect approximately 1,350 employees to COVID-19 support schemes throughout 2020/2021, reducing the number of staff working on tax compliance.
This reduction in capacity caused a drop in tax revenues from an average of 5.2% to 4.2% between 2020 and 2022, resulting in a loss of £9 billion.
The head of the NAO, Gareth Davies, stated that there is now a risk that more people may fail to pay the correct amount of tax or evade investigation or prosecution. He emphasised the importance of taking swift action to address this issue in the next two years.
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