The UK’s HM Revenue & Customs (HMRC) has recovered just £440 million this year and £782 million in total from an exchange deal with Switzerland on UK tax avoidance, which was expected to be far less than the £3 billion.
The Public Accounts Committee chairman, Margaret Hodge, stated that HMRC would be £2.5 billion light this year.
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Edward Troup, director of HMRC, said that it could not guess at how much tax would be owed by those who use legal means of avoidance and they can only collect the tax that the law allows them to.
Hodge said the existence of a £35 billion tax gap, the difference between the total amount owed to HMRC and the figure collected has suggested the body was institutionally incapable.
HMRC claimed that other factors including £5.1 billion lost to evasion, £5.4 billion to the hidden economy and £4.3 billion to companies and individuals were all more costly than avoidance.
Jim Harra director of HMRC said: "Our tax gap is a complete measure of what tax we’re owed under rules currently in place."
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By GlobalDataTroup and Harra will investigate situations where evidence suggests there may be the avoidance or evasion of tax and bring a prosecution if necessary.
The £780 million includes an initial £340 million paid in January, with a further £440 million raised this financial year.
