New 'hidden economy' group to be led by HMRC

Date: 6th January 2010

A new group of experts led by HM Revenue and Customs (HMRC) is set to examine new ways of stopping people from entering the "hidden economy".

According to HMRC, the UK economy loses approximately £3 billion per year from businesses that work outside of the official taxation regime.

New ways of helping people out of such working practices will also be explored by the Hidden Economy Advisory Group, which will be formed from independent experts including professor John Hasseldine of the Tax Research Institute at Nottingham University Business School, Paul Webley, professor of economic psychology at the School of Oriental and African Studies, Andrew Cave, head of policy at the Federation of Small Business.

Mike Eland, chair of the group and director general of enforcement and compliance at HMRC, said: "We estimate that the hidden economy contributes to around 7.5 per cent of the net tax gap, which means we could be losing in the region of £3 billion a year from people who are living and working in the hidden economy.

"They also gain an unfair competitive advantage over businesses that pay their taxes. This new group of experts with a variety of experience will identify new practical steps to tackle this problem."

Posted by Anthony Burns