It's time to tackle tax evasion says Richard Murphy

Tax evasion is the biggest cause of the UK tax gap, not big-business tax avoidance, and it needs to be tackled, director of Tax Research UK Richard Murphy said yesterday at a conference on taxation.

By Samera Owusu Tutu

31 Oct 2014

Speaking at the Public Accounts Committee’s (PAC) conference on the impact of globalisation on taxation, Murphy stressed that significant progress had been made to tackle big business tax avoidance and it was time to address the bigger issue of tax evasion.

“I was involved in creating the fair tax mark,” Murphy said, “we're [now] getting large companies saying: ‘We want to be clear about our tax; we want to disclose what we do; we want to make it clear we won't go near tax avoidance schemes.’”

The conference highlighted work by the OECD, in conjunction with the G20, on driving forward formalised processes for the international exchange of information to help tackle global tax avoidance.

Murphy, who is credited for being the first person to investigate Google’s tax affairs, went on to say we are dealing with the thin end of the UK tax-gap wedge: “I think multi-national companies are only responsible for maybe 10% of the total UK tax gap. The big issue is tax evasion, and it’s not on this agenda in a clear way at the moment.”

At the PAC taxation conference Margaret Hodge MP said the tax gap had grown to £34bn. Murphy, however, feels the figure is much higher. In a recent report written for the Public and Commercial Services Union (PCS), Murphy expressed that the UK tax gap stood at £119.4bn.

“I believe [tax evasion] is costing the UK £80bn, and it costs the whole of Europe 850bn euros; yet we're still talking avoidance.”

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