The reality of HMRC and the tax gap is they’re losing because they don’t have the people to do the job

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As the Guardian reports this morning:

The number of tax evasion cases being pursued by HM Revenue & Customs has fallen to its lowest level in five years.

Lawyers Pinsent Masons said the number of serious tax evasion cases — with more than £50,000 of suspected tax evasion — had fallen by a quarter in the past year. Meanwhile the number of raids undertaken in the 2011-12 tax year has risen to 499 from 196 in the 2010-11 tax year.

In 2011-12 there were 3,346 suspected tax avoidance cases, down from the 4,506 in 2010-11, according to data compiled by the law firm.

Definitions matter of course on just what a case is, but in this case so long as consitent defintions are used the message here is very loud and very clear: HMRC simply don't have the resources to do the job of tackling the tax gap. Some of us have been saying so for some time.

In that light, Danny Alexander's claim he's cracking down because he's reallocating 100 tax inspectors to an "affluence unit" looks to be exactly what it is - a sham.

And the government's challenge to tax avoiders is shown to be utterly hollow. People have a right to be very angry about that.