Tag Archives | tax evasion

Cost of Benefit Fraud v Tax Evasion in UK

Benefit fraud and tax avoidance are currently emotive topics. What is the extent of benefit fraud and tax fraud in the UK?

Benefit Fraud

  • For 2011/12 (preliminary), it is estimated that  2.0 per cent of total benefit expenditure  was overpaid due to fraud and error.
  • In 2010/11 – benefit fraud was estimated at £3.4bn – 2.2% of total benefit expenditure (£154bn)
  •  (Dept for Work and Pensions)
  • It is also estimated that 0.9%, or £1.3bn, of total benefit expenditure was underpaid due to error.

More specifically

  • 4.4%, or £350m, of Income Support expenditure has been overpaid;
  • 6.5%, or £290m, of Jobseeker’s Allowance expenditure has been overpaid;
  • 6.0%, or £500m, of Pension Credit expenditure has been overpaid;
  • 2.4%, or £130m, of Incapacity Benefit expenditure has been overpaid;
  • 4.7%, or £1030m, of Housing Benefit expenditure has been overpaid.
  • (Dept for Work and Pensions)

Public Perception of Benefits

The public have an increasingly negative opinion to benefit claimants. A study suggested that 1 in 5 people believe a majority of claims are false, while 14% believe a majority of claims are fraudulent.  Benefits stigma

Benefits Unclaimed

“In 2010 an estimated £16 billion in benefits and tax credits were unclaimed. (charities claim £16bn a year unclaimed at Telegraph)

For example, the Dept for work and pension estimate:

Pension Credit: The number of pensioners that were estimated to be entitled but not claiming Pension Credit was between 1.21 million and 1.58 million. The total amount of Pension Credit unclaimed was between £1.94 billion and £2.80 billion.  (DWP) Continue Reading →

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