A recent look at UK welfare fraud surprised lots of folks; in fact a survey last year in UK showed that folks thought over 20% of the welfare budget was claimed fraudulently. The Government’s own monitoring over the years puts the figure at less than 1% (0.7%). It’s still a lot of dosh, £1.3 Billion and fiddling is wrong. Period. But looking at the big picture, HMRC reckons that the difference between the taxes it should receive and what it collects is more than £30 Billion! Its referred to as the “Tax Gap”. There are arguments on whether the Gap is as high as £30 Bil, but the most conservative figures still show the Tax Gap is always much higher than welfare fraud, at “best” only 5 times, at “worst” 25 times .
Some £5 Billion of that outstanding tax is avoided through cleverly devised schemes which may be within the letter of the, only just, but certainly not within the spirit of the law. Whatever way you look at it there are a lot of folk not doing the right thing.
What’s the situation in Ireland? It has been strongly suggested to me that the Irish fiddle their welfare entitlements much more than the British, so I rose to the bait and did a bit of looking.
Total Welfare budget in2015 Ireland was $19.6 Billion ($ equals Euro on my PC!) The last year a breakdown is available is 2014 which shows Welfare over payments amounted to $124 Million, which is a very similar % to the UK figure, it’s less than 1%.
Of this $124 Mil, 5% ($6 mil) was staff mistakes, 42% ($52 mil) fraud, 40% ($49 mil) “mistakes” changed recipient’s circumstances. The Dep’t successfully recovered $86 mil out of the $124 Mil, meaning we “completely lost” 38 Mil. That’s a lot of dosh in anyone’s books. There is no acceptable face to fiddling, be it welfare or taxes, but at least I reckon the welfare fiddles are spent in the local economy whereas the tax fiddles often finish up banked offshore or spent somewhere other than in the local economy,
And once again we are much more like our UK neighbours in the area of tax dodging . The Irish Revenue also have a “Tax Gap”. Some of the well documented areas of Government Revenue losses are. (Figures from Irish Retail section of IBEC)
- Illegal Cigs $526 Mil…Diesel Laundering $155 Mil… Counterfeit Goods $62 Mil. Total $742 Million.
- The Revenue are persistent but in Aug 2016, they finally gave up chasing several folk and announced that it was “writing off” $260 Mil of outstanding taxes.
- The Quarterly List of Defaulters shows that some of our wealthiest do their best to avoid paying their fair share. Each Quarter the Revenue recover between $18 & 20 Million from Defaulters, that’s $77/80 Mil annually, and that’s only the ones they catch!
- The Defaulters are usually/ naturally high earners and “respected” members of the community, Accountants, Medical consultants, Company directors, Builders and even well-known popular entertainers. (Paddy Cole $834,000)There are loads more smaller amounts. Here are some recent Quarterly Totals, up to 31.12.2015, $17 Mil… Up to 31.03.2016, $25 Mil… Up to 31.06.2016, $17.5 Mil.
- Here are a couple of examples of large settlements in 1st Qtr 2016. James Daly, Cork, Accountant, $4 Mil. Oliver Barry, entertainment organiser, $2.2 Mil. Ml Murphy, Builder $7 Mil. Kevin Cronin, Med Consultant $534,000. James Farrell, Coy Director, $1.4 Mil. HM Yachts, Cork, $$924,000.
- There is demonstrably a bias (unfairly in my opinion) against the less well off in our community, a very recent example was a Headline stating $185,000 Welfare Fraud recovered by CAB (Criminal Assets Bureau). However, in the body of the article it mentioned that CAB also chased down $6,600,000 (35 times as much) in Unpaid Taxes….Which do you think should have been in the Headline?