BBC podcast corrects claim that tax fraud is ‘30 times larger’ than benefit fraud

In a recent episode of the BBC’s Strong Message Here podcast, presented by the writer Armando Iannucci and journalist Helen Lewis, it was claimed that “tax fraud is 30 times larger than benefit fraud”.

This isn’t correct. After Full Fact got in touch, the BBC removed the claim from the podcast episode, which was released on 20 March and aired on BBC Radio 4 the same day, and it has issued a correction.

It says: "In a discussion about the use of political language around welfare and benefits, it was stated that tax fraud in the UK is thirty times larger than benefit fraud. This is incorrect.”

Broadcasters should make every effort to achieve due accuracy in all output. False or misleading claims should be appropriately and clearly corrected in a timely manner. We’re grateful to the BBC for taking action to correct this error.

The same claim has also been shared on Facebook. We regularly see claims circulating on social media comparing lost tax revenue with the scale of benefit fraud. 

Benefit fraud vs tax fraud

The latest figures estimate that in 2023/24 £7.4 billion of benefits expenditure was overpaid due to fraud. 

The latest government figures on tax fraud—also known as tax evasion—cover the 2022/23 financial year. They show that the amount of revenue estimated to have been lost due to tax evasion was £5.5 billion. 

Overpayments due to fraud accounted for £6.3 billion of benefits expenditure in 2022/23. 

So as set out in the BBC correction, in the most recent year for which we have comparable data, official estimates suggest benefit fraud actually exceeded losses due to tax fraud.

It’s important to note that the official estimates of the amount of tax evasion have been questioned by some. For example, a report published last month by the House of Commons Public Accounts Committee stated that HMRC was “likely to have underestimated the scale” of it, though did not estimate by how much.

However we’ve not seen any credible estimates suggesting that the true scale of tax fraud could be such that it is 30 times the amount lost to benefit fraud.   

What about the ‘tax gap’?

Claims which compare tax fraud and benefit fraud are often based on estimates of the size of the ‘tax gap’—the difference between the amount of tax collected by HMRC and the amount that theoretically should have been collected. This includes tax evasion (which is illegal), but also non-illegal forms of tax underpayment or non-payment, such as tax avoidance.

HMRC estimates that in 2022/23 the tax gap was approximately £39.8 billion—around six times higher than benefit fraud that year.

Some independent estimates have suggested the true size of the tax gap could be much higher, though other experts have challenged this analysis. 

In response to the publication of the most recent HMRC tax gap estimate (for 2022/23), the economist Richard Murphy—who has claimed HMRC significantly underestimates the scale of the tax gap—told the Guardian that he believed the total amount of tax not being collected could be closer to £100 billion.

While assessing that estimate is beyond the scope of this fact check, even that much higher figure is not 30 times the amount estimated to be lost to benefit fraud.