Fears over the current level of tax evasion and its effect on the economy are overblown, the UK law firm Pinsent Masons has claimed, as new analysis shows the number of serious cases being investigated by HM Revenue & Customs (HMRC) has plummeted over the last two years.
Just 2,888 suspected serious cases of tax evasion were identified by HMRC in the last tax year, Pinsent Masons says. That is 16 per cent lower than the year before, when 3,456 suspected cases were pinpointed, and more than a third lower than 2010-11, when the number was 4,506.
HMRC defines a case as serious if it could result in prosecution or if the tax believed to have been evaded totals £50,000 or above.
The figures come days after G8 leaders agreed new measures to clamp down on tax evasion which, unlike tax avoidance, is illegal. The communiqué from last week's summit in Northern Ireland said authorities "across the world should automatically share information to fight the scourge of tax evasion".
Claiming that some "of the speculation about tax evasion is a little over the top", Phil Berwick, a partner at Pinsent Masons, said: "This decline in suspected tax evasion doesn't tally with the rhetoric from some quarters that the British economy is being undermined by a chronic under-collection of tax revenues."