From the fact checkers

Both benefit fraud and people who fail to pay their taxes pose a significant cost to the UK treasury. In the interests of fairness to decent, honest people at all levels of society who pay the tax they owe and claim only what they are due, it is important to crack down on both.

However, some people with a political agenda will try to convince everyone that one problem is much larger than the other.

An example is the false claim recently circulating on X (formerly Twitter) and Facebook, which has been debunked by Full Fact here, that "For every 1p lost to benefit ‘thieves’, £2 is lost to tax avoiders."

As Full Fact put it,

"This isn’t correct. The Department for Work and Pensions estimates that in 2022/23 £6.5 billion was overpaid in benefits due to fraud, while HMRC estimates that, in the most recent financial year for which figures are available, approximately £1.4 billion less was collected in tax than theoretically should have been as a result of tax avoidance."

So tax avoidance, using that expression very precisely to mean paying less tax through means which are within the letter but not the spirit of the law, reduces tax revenue by little less than a quarter of the cost of benefit fraud, not 200 times as much.

If you want to consider tax evasion - which means illegal failure to pay tax - as well as tax avoidance, these two forms of failure to pay tax together are estimated to have cut tax revenue by a total of about £6.1 billion in 2021/2, compared to an estimated £6.4 billion overpayment due to benefit fraud.

If you specifically wanted to compare benefit fraud with tax avoidance, a more accurate statement than the debunked one above would read

"For every pound lost to benefit 'thieves' it is estimated that just under 22 pence is lost to tax avoiders."

If you were equally interested in cracking down on tax evasion, you might write

"For every pound lost to benefit thieves, it is estimated that about 95 pence is lost to a combination of tax evasion and tax avoidance."

So benefit cheats and people who don't pay their taxes cost the rest of us a very similar amount, the former being marginally more. 

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