Government lacks a clear understanding of the scale of the fraud problem and departments vary in their ability to identify and address fraud risks. The data that does exist is patchy, inconsistent and of variable quality. The most comprehensive data relates to areas of known risk – tax credit and benefit fraud – but information across the rest of government is clearly incomplete. It is difficult to formulate solutions if the scale and nature of the problem is unknown.
Now I know this was about fraud, and not the tax gap, but candidly if they are this clueless within their own systems then the chance they really have got their tax gap estimate right - based on their own systems - is very low indeed.
It really is time HMRC were honest about this.