It wos the Sun wot couldn’t do maths: Prioritising benefit frauds when tax fraud is 10x worse

Why on earth would the Sun focus on benefit fraud rather than tax avoidance, asks Alex Hern. Could it be because of the actions of their proprietor, one R. Murdoch Esq?

 

The Sun has today launched its campaign against tax evasion, vilifying those, usually the very richest in society, whose scams cost the taxpayer a total of over £15 billion a year (pdf).

Hang on, sorry.

The Sun has today launched its campaign against benefit fraud, vilifying those, usually the very poorest in society, whose scams cost the taxpayer a total of over £1 billion a year (pdf).

Tom Newton Dunn, the paper’s political editor, writes:

THE SUN today calls on readers to help end the benefits frauds that cost the country a record £1.2 BILLION last year.

We urge Brits to shop the cheats stealing from honest taxpayers when the nation can least afford it.

Campaigning Iain Duncan Smith last night backed The Sun’s crusade to end the scandalous benefits fraud crippling the country…

The Sun’s first move is to hand over the evidence on Denise Knight, 44, who enjoyed a day on theme park white-knuckle rides despite claiming Disability Living Allowance for a bad back.

The Department for Work and Pensions will investigate whether the mum from Llangadog, Carmarthenshire — featured on our front page yesterday — is still entitled to her £50-a-week benefit.

The decision of the Sun to hone in on benefit fraud is an odd one. If, as they suggest, the £1.2 billion a year lost to deliberate fraud is ‘crippling the country’, then tax evasion, which costs the treasury over ten times that, must be outright killing it.

The annual fraud indicator (pdf) estimates a £15 billion loss through tax fraud – deliberate underpayment of taxes. And rather than their targets being people who are ill-placed to defend themselves against accusations, the archetypal tax evader is Conrad Black – rich, above the law, and with full knowledge of what they are doing.

But that’s the low end of the estimate. The Tax Justice Network reported that almost £70 billion were lost to what they call the ‘shadow economy’.

And when you count tax evasion – which includes everything from companies having PO box offices in the Cayman Islands to individuals, from leading businessmen to top-tier politicians, paying themselves as companies – the difference becomes staggering. The TJN estimate over £120 billion of taxes are undercollected through evasion and avoidance annually.

Of course, there may be a reason for their blind eye. As Left Foot Forward reported last year:

As far back as 1995, the Independent reported that in the previous ten years, Murdoch’s News International had paid “virtually no tax”.

While corporation tax was set at 33 per cent, NI paid £11.74m of its £979.4m profit – just 1.2 per cent.

As recently as 2009, News Corporation’s proprietor was being pursued by his homeland’s government after failing to pay the correct rate of corporation tax, both in Australia and the United States.

Earlier this year, Australian Capital Territory (ACT) treasury officials won a legal battle,which awarded them A$77m for avoided taxes and duties. The Guardian reported in 2005 that Murdoch’s family company was moved to Bermuda; the tax bill of A$1.2 billion had the potential to be avoided.

Of course, it may be Murdoch is unaware of his corporation’s tax-shy practice given how little he knows about other key operational issues at News International.

Update: We’d underestimated tax avoidance by £50 billion. Our graph is now even longer.

See also:

The government’s got big plans for workfare – don’t expect them to back down easilyIzzy Koksal, February 27th 2012

The DWP’s ‘scrounger’ rhetoric is causing real harmAlex Hern, February 6th 2012

Labour’s untenable position on social security and disabilityDeclan Gaffney, January 3rd 2012

Tax isn’t taxing when you’re Goldman SachsAlex Hern, December 20th 2011

Hypocrite Murdoch tells us how to vote yet avoids billions in taxClaire French, July 11th 2011

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68 Responses to “It wos the Sun wot couldn’t do maths: Prioritising benefit frauds when tax fraud is 10x worse”

  1. Deborah

    It wos the Sun wot couldn't do maths: Prioritising benefit frauds when tax fraud is 10x worse: http://t.co/mH4LqZQm by @alexhern

  2. Patron Press - #P2

    #UK : It wos the Sun wot couldn ’t do maths: Prioritising benefit frauds when tax fraud is 10x worse http://t.co/8zcCdBZn

  3. Independent Scotland

    It wos the Sun wot couldn't do maths: Prioritising benefit frauds when tax fraud is 10x worse: http://t.co/mH4LqZQm by @alexhern

  4. Martin Steel

    It wos the Sun wot couldn't do maths: Prioritising benefit frauds when tax fraud is 10x worse: http://t.co/mH4LqZQm by @alexhern

  5. malcolm

    It wos the Sun wot couldn't do maths: Prioritising benefit frauds when tax fraud is 10x worse: http://t.co/mH4LqZQm by @alexhern

  6. DJC

    The Sun keep up their 'demonise the poor for simply existing' rhetoric. #don'tbuytheSun http://t.co/PaSVRvMk

  7. Liam Conway

    The Sun up to it usual tricks trying to victimise the vulnerable http://t.co/cWiXP4Sf

  8. Tony Whitfield

    It wos the Sun wot couldn't do maths: Prioritising benefit frauds when tax fraud is 10x worse: http://t.co/mH4LqZQm by @alexhern

  9. leftlinks

    Left Foot Forward – It wos the Sun wot couldn’t do maths: Prioritising benefit frauds when tax… http://t.co/nDr1DJ6s

  10. HaywoodsLocalVoice

    Left Foot Forward – It wos the Sun wot couldn’t do maths: Prioritising benefit frauds when tax… http://t.co/nDr1DJ6s

  11. lisa

    RT @leftfootfwd: It wos the Sun wot couldn't do maths: Prioritising benefit frauds when tax fraud is 10x worse http://t.co/jdVF1a8p

  12. john peter ingamells

    RT @leftfootfwd: It wos the Sun wot couldn't do maths: Prioritising benefit frauds when tax fraud is 10x worse http://t.co/jdVF1a8p

  13. STEPHEN LAVERY

    It wos the Sun wot couldn't do maths: Prioritising benefit frauds when tax fraud is 10x worse: http://t.co/mH4LqZQm by @alexhern

  14. Pulp Ark

    It wos the Sun wot couldn’t do maths:… http://t.co/bR3semWM #Media_Integrity #benefit_fraud #tax_avoidance #muslim #tcot #sioa

  15. JC

    As many commenters explain, tax avoidance is entirely legal. If we are unhappy about certain aspects of it, we should lobby our politicians to change the laws. I certainly would prefer them to be much simpler, so that loopholes cannot exist. Do not blame the people that do it, and be very wary of the idea that laws can be changed retrospectively.

    Let’s have more about tax evasion, or tax fraud as you put it. You’re right to have a shot at Conrad Black, but we should also be targeting those who work “cash in hand” and those that support it by asking tradesmen for discounts for cash. Note that it is often the lower paid who indulge in these activities.

    After all, fraud is fraud and we should be stopping it whenever possible as it is taking money from the honest workers.

  16. Anonymous

    Guardian – off shore trusts to evade UK tax

    Ken Livingstone – Ltd company to retain profits and avoid employer’s NI

    Yep. Socialism at work.

    What’s the real problem?

    A government that is spending too much money.

    Take one example, DLA. 1 million used to claim the equivalent. 2.5 million now do. It’s fraud by government to hide the number of unemployed.

    Where is that in your fraud figure?

    What about false accounting? Where is the state pension as a government debt? Not there. Fraud, and far more dangerous that taxation. The reason is that we’re at the point were the government can’t afford to pay out on its pension promises. For most people that is all they have for their retirement, and the government is going to steal that.

  17. Alex Smith

    It wos the Sun wot couldn't do maths: Prioritising benefit frauds when tax fraud is 10x worse: http://t.co/mH4LqZQm by @alexhern

  18. Blarg1987

    Valid points but it would not be so bad if companies and organisations did not avoid their moral duty of paying proper taxes and in alot of cases get subsidised goods and services from the tax payer, I wonder how many people who drive nice cars and own buisnesses write it off against tax, there lies the problem.

  19. Bananayz

    It being legal doesn’t make it right..
    Sadly we’re not rich enough to lobby them. That and it all works in favour of their big business friends so they wouldn’t change it anyway, there’s a reason it’s legal, because the ones in control of the laws are the ones who do it.

  20. Jacob Hatton

    define right. we all pay tax based on what we are entitled to pay. if you are an employee, you and your employer pay through PAYE. if not it becomes more complicated. we do not all necessarily do full tax returns like many nations do and so to many in the UK tax is just ‘the thing you pay at a set rate depending on how much dosh you have’, but that simply isn’t the case. in a lot of countries with complex tax codes everyone, including the poor will claim deductibles for this or that. what is ‘right’ is that the system is fair, not whether somebody legally claims a capital gain over an income when they sell their house.

  21. Anonymous

    What is really irresponsible about The Sun’s campaign is that it will drive up the amounts of public money currently wasted on chasing up the 96% of malicious calls made to the benefits hotline.

  22. Shirley

    @LordBlagger: did you know that part of the increase in DLA claimants is due to:
    a) premature babies now living where once they would have died, but living disabled;
    b) 1 in 5 soldiers come back from war with at least 1 limb missing;
    c) general population growth: the population has grown significantly since DLA was introduced;
    d) people surviving serious accidents/injuries/illnesses because of developments in medical care; e) people living longer and illnesses that would have shortened life incredibly are being treated better so people who are chronically sick live longer?

    DLA is the most difficult benefit to get, has to be supported by your GP, includes a medical assessment and even then claims are regularly turned down. DLA fraud is estimated by this government to be less than 0.5%, and its own investigation department only managed to find 79 potentially fraudulent claims, but none of them were ever taken to court. Yes, there will always be a few who slip through the net, but please, do not be deceived by this governments claims about DLA and how giving Personal Independence Payments will help disabled people, it is their stated aim to cut benefits to disabled people by 20%.

    I think you are muddling up DLA which is a non-means tested benefit to support the extra costs a disabled person has in their already difficult life with Incapacity Benefit, (now Employment Support Allowance) which the Thatcher and Major governments used to massage the long-term unemployed figures by moving people off unemployment benefits onto incapacity benefit.

  23. JC

    I don’t understand what you mean by not being rich enough to lobby politicians. You can write to your MP. I have done and he replied promptly supporting me. you could write an article here supporting tax reform and a more simple system with few allowances and loopholes. Doesn’t cost much.

  24. Why is the Sun prioritising benefit fraud when the tax gap is 100 times bigger? » Tax Research UK

    […] Left Foot Forward has blogged that it would have been great to report today that: The Sun has today launched its campaign against tax evasion, vilifying those, usually the very richest in society, whose scams cost the taxpayer a total of over £15 billion a year (pdf) […]

  25. Guest

    DLA is not an unemployment benefit: many of those who claim it do so in order to cover extra costs that their disability poses. Without it, many disabled people who do work would be unable to do so. The DWP’s own figures put DLA fraud at 0.5%.

  26. DJC

    The Sun keep up their 'demonise the poor for simply existing' rhetoric. #donotbuytheSun http://t.co/PaSVRvMk

  27. Peter Langdon

    Tax avoidance is an issue for the PM when Ken does it, not so much when Murdoch does: http://t.co/2tj22sdj #PMQs

  28. Lorien Hill

    RT @leftfootfwd: It wos the Sun wot couldn't do maths: Prioritising benefit frauds when tax fraud is 10x worse http://t.co/KP6XCkkj

  29. Stephen Fulham

    Murdoch press again proving to miss the real issue: http://t.co/Bnp7aFCW

  30. Leon

    RT @leftfootfwd: It wos the Sun wot couldn't do maths: Prioritising benefit frauds when tax fraud is 10x worse http://t.co/KP6XCkkj

  31. Anonymous

    Like Ken Livingstone and the Guardian. Not a peep here apart from me on the gross hypocrisy there.

    Gordon Brown with his limited company doing likewise.

    Tony Blair, multi millionaire – what tax has he paid on his earnings?

    Why shouldn’t people pay the same tax and use the same mechanisms of these paragons of socialist virtue?

    Now for your ‘proper tax’.

    What’s proper about paying tax and not getting services because previous governments ran up debts? Why should an 18 year old be paying taxes and getting bugger all in return because Gordon Brown bought banking shares at a huge price, paying over the odds.

    Now for retrospective legistlation. Who else can we get with that trick?

  32. Anonymous

    So if you are in a wheelchair, yep your costs are higher. My view and I’ll argue it strongly is that society pays those extra costs in full.

    However, if you are off sick because of stress, why should you get the same as the person in the wheelchair?

    The 0.5% is their estimate of fraud by claimants. I’ll counter that its wrong. It is after all in their interest to say its low.

    1. Before even being assessed, lots of people come of DLA. Many times the 0.5% figure. A reasonable assumption is that they aren’t entitled to DLA, and so drop out rather than risk being done for fraud.

    2. The increase in DLA. From 1 million it has risen to 2.5 million. Has their been a pandemic causing disability? Nope. Has the NHS been crippling people? (Actually the most likely large cause, but not 1.5 million cases). Huge increase in work place accidents? No. What is it? It’s fraud by governments hiding unemployment.

    Over to you for your explanation of a 1.5 million increase in the disabled.

  33. NORBET

    I’ve rang the hotline up ….reported some German immigrants in a London Council House that should be sent back …Betty Saxe Coburg and her husband Phil the Greek and mentioned her brood , Prince Tampax and Camilla , ” Theatrical Edward ” , Randy Air Miles Andy , and the other hangers on ……a certain Emma Harrison that should be strung up ….and asked for a certain Mad Eton George and Lord Snooty of Chipping Norton to be reported for dishonestly claiming Child Benefit and DLA too .

    Yours Faithfully

    K. McKenzie
    666 Frothing at the mouth Apartments
    Wapping
    East London

  34. Spence

    @FullFact Are the numbers in this correct http://t.co/TfR7EqWa

  35. Guest

    thanks for making those points, Shirley. I absolutely agree with them, especially about how difficult it is to get: you have to have a medical condition which will affect you for at least 6 months for a start. A “dodgy back” won’t be sufficient.
    LordTosser (or whatever you call yourself): People may have difficulty in using public transport for reasons other than being in a wheelchair: problems walking or standing may make access difficult, as may some mental illnesses (no doubt you’ll disagree, but just because you don’t recognise these things doesn’t mean they don’t exist). Special diets can be expensive, for example.
    It’s very much in the DWP’s interest to inflate the amount of fraud to justify restricting the benefit, the way it is administered and the length of time it can take to process it. The 0.5% figure, by the way, is more than amply covered by the people who could claim for it but don’t. The 50-odd page form asking extremely personal and embarrassing questions about your bodily functions, whether you wet the bed and if you do asking you explain if it’s just a little leak, or whether you lose full bladder control may put some people off. Some people may get better before they have a medical, some, of course, will die before a decision is made.
    I’ve done my best to educate you, but don’t expect to hear from me again. i have better things to do than to feed trolls.

  36. scaf

    It wos the Sun wot couldn't do maths: Prioritising benefit frauds when tax fraud is 10x worse: http://t.co/mH4LqZQm by @alexhern

  37. John Lovely McGuirk

    Is there some confusion in this article between tax avoidance and tax evasion?

  38. Anonymous

    OK. Here is a proposal.

    1. All government spending gets published, down to the penny. It’s actually cheaper publishing the lot that trying to query the accounting system with a limit.

    2. All spending gets attached to a company name, company number, and VAT number if relevant.

    3. Likewise for all spending on individuals.

    Taxpayers have a right to know where their money is being spent.

    Then sit back. It won’t take long for people to mash the data and find out where the frauds are likely to be taking place.

    How about offering rewards as a percentage of the frauds stopped, money recovered? 5%

    For example, councils paying companies, Companies run by councilors or relatives, and that relationship not declared. See Bexley for examples.

    I suspect that very quickly, lots of people would stop claiming.

    What’s there to hide?

  39. H. O.

    RT @leftfootfwd: It wos the Sun wot couldn't do maths: Prioritising benefit frauds when tax fraud is 10x worse http://t.co/FvqCHZnO

  40. Les Tricoteuses

    It wos the Sun wot couldn't do maths: Prioritising benefit frauds when tax fraud is 10x worse | Left http://t.co/ZrRUSK7o

  41. Michael Smith

    It wos the Sun wot couldn't do maths: Prioritising benefit frauds when tax fraud is 60x worse | Left Foot Frwd http://t.co/FVfCI5GN (my 60)

  42. Martin Westby

    It wos the Sun wot couldn’t do maths: Prioritising benefit frauds when tax fraud is 10x worse.
    http://t.co/8B92KoF4
    #fb

  43. Ali

    It wos the Sun wot couldn’t do maths: Prioritising benefit frauds when tax fraud is 10x worse.
    http://t.co/8B92KoF4
    #fb

  44. Anonymous

    Who you trying to kid that publishing the lot down to the last penny and last individual would be cheaper? If it was, government’s would have dne so a long time ago. You’ll also have another hurdle to overcome, the Data Potection Act. How are thing’s in LaLaLand these days? Still pretty cuckoo by the looks of it.

  45. Janet Graham

    It wos the Sun wot couldn’t do maths: Prioritising benefit frauds when tax fraud is 10x worse.
    http://t.co/8B92KoF4
    #fb

  46. Anonymous

    Very simple. If you want the cash, your name and address will be published, as it is for companies.

    You will find lots of fraud.

  47. Chris Salter

    RT @leftfootfwd: It wos the Sun wot couldn't do maths: Prioritising benefit frauds when tax fraud is 10x worse http://t.co/wdusKL8L #ppnews

  48. Rebecca Devitt

    RT @leftfootfwd: It wos the Sun wot couldn't do maths: Prioritising benefit frauds when tax fraud is 10x worse http://t.co/wdusKL8L #ppnews

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