Almost half of Northern Ireland taxpayers under-report income
Almost half of all self assessment taxpayers in Northern Ireland under-report their income, according to new research.
A study by the Centre for Competitive Advantage in the Global Economy (CAGE) also found that, across the UK, more than three in ten of those who complete their own tax return do not pay the full amount of tax.
This adds up to a "tax gap" of more than £8 billion. Around 4bn of that figure is owed by only 2% of self assessment taxpayers.
Self assessment tax returns are used by those who are self-employed, run their own business or work on a freelance basis.
The research found that men are more likely to under-report than women and by larger amounts. The issue is most prevalent in the construction, transport and hospitality industries.
“While this might make us sound like a nation of cheats, most of these people owe relatively small amounts. It might be that some of these cases are genuine mistakes," the report states.
In order to cut down on the on the amount that goes uncollected through underpayment, the research argues HMRC should fund more tax audits.
Dr Arun Advani of the University of Warwick, who authored the report, said: "More money from the Treasury to do these valuable audits would reap significant rewards, paying for itself and bringing in additional funds.”
“Cutting auditors is the hallmark of short-term thinking. It reduces current costs, while money from past audits keeps rolling in. But that is not a sustainable strategy.”
Belfast Telegraph Digital