Business News
The £15bn Price Tag on Tax Fraud in the UK
Fraud figures reported by the National Fraud Authority (NFA) have seen an increase of almost a third on last year’s data, and perhaps the most interesting feature of this is the astonishing £15bn being lost to tax fraud. The breakdown of this shows £7bn lost to tax evasion, £5bn to criminal attacks and £3bn to hidden economy.
Perhaps surprisingly, benefit and tax credit fraud are sidelined at only £1.5bn, with evasion proving the biggest problem in this area. The NFA reports that more than half of UK fraud at £21bn occurs in the Public Sector. Perhaps thanks to the more concerted efforts to report such losses, this fraud overshadows losses in the Private Sector of £12bn, individual fraud at £4bn and Charity at £1.3bn.
The rise of the intellectual criminal has played a major role in increasing Online Banking Fraud by 14%, bank robbing by malware, security software, and stealing through the customer and not directly with the bank via vulnerable PCs. ‘Phishing’, the modern day online theft of personal details, rose by more than 16% in 2009 with 51,000 reported incidents. A scary thought on the obvious ease and frequency that this occurs; gone are the days of rifling through one’s post for sensitive details.
SMEs have not escaped either, with £780m fraud reported by the NFA and the Federation of Small Businesses. Mortgage Fraud and Insurance Fraud sit at a lowly £1bn and £2.1bn in comparison to Public Sector losses.
Bernard Herdan, the NFA’s chief executive, urged that urgent action is needed from the Government, the private sector and the public to “stem the rising tide of fraud” following the report’s findings.
Evaluating the true cost of fraud is no easy task, with the final figures reliant on diligence from those on the lookout to report it. Following Herdan’s comments on the report, Jim Gee, director of Counter Fraud Services at PKF, added: "Assessing the financial cost of fraud to UK PLC is a difficult job. The NFA has done a good job collating this information but, through no fault of its own, its figures are probably an underestimate."
Please click here to view the full Annual Fraud Indicator 2011 report.
