Do benefit fraud investigators outnumber tax inspectors 10:1?

Published: 14th Apr 2016

In brief

Claim

There are 10 times more staff dealing with benefits abuse than with tax evasion by the super-rich.

Conclusion

There are more people working on benefit fraud, but not 10 times more. 3,765 staff currently work at the DWP investigating benefit fraud and error, compared to 700 at HMRC who focus on the wealthiest individuals. Over 26,000 people at HMRC work on all tax enforcement and compliance.

 

3,250 people investigate benefit fraud compared to 300 who investigate tax evasion.

 

This isn’t comparing like-with-like and the DWP figure is out of date. The staff mentioned work on all benefit fraud and error and tax evasion and avoidance, not just the illegal activities.

Claim 1 of 2

“Some 3,250 Department for Work and Pensions staff have been specifically investigating benefit fraud, while only 300 HMRC staff have been systematically investigating tax evasion…

 “Why have this Government had 10 times more staff dealing often with the poorest in society abusing benefits than with the super-rich evading their taxes?”

Angus Robertson MP, 13 April 2016

It’s wrong to say that only 300 HMRC staff investigate tax evasion. This is just one team within HMRC looking at both tax evasion and avoidance among wealthy individuals. Even then, there are another 400 staff in another team who focus on even wealthier people.

HMRC employs over 26,000 staff working in enforcement and compliance.

Mr Robertson has a point if he means to compare staffing on benefit fraud and error with avoidance and evasion among just the very rich.

The two teams we’ve mentioned add up to about 700 staff focused on these wealthy individuals. Meanwhile just under 3,800 staff work at the DWP’s Fraud and Error Service.

Investigating fraud and error at the DWP

The DWP confirmed to us that currently 3,765 staff do work relating to benefit fraud and error at what’s called the Fraud and Error Service. Mr Robertson’s figure is an older version of this.

Benefit fraud is illegal—it happens when people knowingly claim too much. Error, on the other hand, involves accidents on the part of claimants or officials. Benefit fraud was estimated to cost £1.3 billion in 2014/15. Adding in error there was a total of £3 billion overpaid in benefits.

Welcome to the Affluent Unit

Tax evasion is illegal activity where people conceal or misrepresent information in order to reduce the tax they pay. Avoidance is the exploitation of tax rules to gain an advantage which wasn’t intended by Parliament, but which is legal.

Evasion was estimated to cost £4.4 billion in 2013/14, and adding in tax avoidance puts the total at just over £7 billion. Other activities also add to the bill for lost tax.

The Affluent Unit works within HMRC, and is tasked with investigating where wealthy individuals are avoiding or evading taxes. It was set up in 2011, and covers people with incomes of over £150,000, or wealth of between £1 million and £20 million.

The unit has about 300 staff, although it’s difficult to get a precise, up-to-date figure. It reportedly employed 327 to look at evasion and avoidance in 2014/15.

This doesn’t include the wealthiest individuals

There’s also another unit which covers people with wealth over £20 million called the High Net Worth Unit. It has around 400 staff.

So the parts of HMRC covering these activities among the wealthiest individuals could be said to have around 700 staff.

And it doesn’t include everybody else

HMRC told us it had over 26,000 people working across the range of its enforcement and compliance business, which is focused on stopping both tax evasion and avoidance. It said its dedicated units were important parts of that, but far from the sum total.

The SNP told us it acknowledged the HMRC figure was just for the very rich and not a like-for-like comparison with the DWP staff. It said it wanted to highlight the lack of transparency with the figures, given that it’s not possible to get specific breakdowns of what HMRC staff are doing, beyond looking at individual teams like the Affluent Unit.

That may well be the case, but Mr Robertson’s claim still wasn’t justified by the available figures.

 

An earlier version of this factcheck appeared in our roundup from Prime Minister’s Questions yesterday.


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