UK Loses Billions to Small Business Tax Evasion, NAO Reports

HMRC criticized for lacking targeted measures and effective strategies to curb rising tax evasion among small retailers.

£5.5 billion lost to tax evasion, with 81% attributed to small businesses.
HMRC lacks a specific strategy to address tax evasion, relying on general non-compliance measures.
Common evasion methods include electronic sales suppression and phoenixism, where businesses repeatedly dissolve and reform to avoid taxes.
New government powers to tackle evasion remain underutilized, with no civil penalties issued for sales suppression.
Calls for tighter controls and better compliance to recover significant sums and ensure fair competition.