Billions of pounds that could be spent on fixing public services and filling the “black hole” in the UK’s finances is being lost through unpaid taxes, MPs have warned.
An “eye-watering” £42bn is outstanding in tax debt, with about 5% of tax owed each year failing to be collected by HMRC, according to the Commons Public Accounts Committee.
The Liberal Democrats labelled the amount “absolutely staggering” as the country battles a cost of living crisis and the biggest outbreak of industrial action in a generation – with multiple sectors striking over pay in the face of high inflation and stretched public finances.
In his Autumn Statement in November, Chancellor Jeremy Huntannounced a raft of tax hikes and spending aimed at making £54bn worth of savings.
But Dame Meg Hillier, chair of the committee, said: “The eye-watering £42bn now owed to HMRC in unpaid taxes would have filled a lot of this year’s infamous public spending black hole.”
MPs on the committee criticised ministers for not doing more to claw back the money owed to the public purse.
Dame Meg said HMRC will only employ more staff to tackle compliance over the next few years and that is “not fast enough to dent the tax gap at a time of huge public sector spending pressures”.
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According to the 22-page document, £731.1bn was collected in taxes and duties in 2021-22.
Although this was the highest on record as the UK emerged from the pandemic, the committee said more could be done to claim unpaid taxes.
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Sky’s Economics and Data Editor Ed Conway unpicks the impact of a year shaped by the cost of living crisis and the mini budget.
The report said that for every £1 that HMRC spends on compliance activities, it recovers £18 in additional tax revenue – and the government “is missing the opportunity to recover billions in lost revenue by not resourcing compliance”.
MPs warned more is now owed in tax debt than before the pandemic, with the debt also expected to fall more slowly than previous years as taxpayers feel the effects of the cost of living crisis.
Dame Meg said HMRC is “settling for trying to recover less than a quarter of estimated losses in schemes such as furlough”.
“We recognise the problems HMRC faces – due to poor controls, the horse has bolted – but we believe there is a moral duty to pursue fraud,” she said.
“HMRC must ensure dishonesty is not seen to create advantage.”
HMRC ‘have 6,000 fewer customer service staff than five years ago’
The Chartered Institute of Taxation (CIOT) welcomed the report and said the current levels of service being provided by HMRC are not acceptable.
The CIOT said HMRC has 6,000 fewer customer service staff than five years ago and the government “appear to have cut staff numbers anticipating efficiencies and time savings from digitalisation that have not yet arrived”.
Susan Ball, president of the CIOT, said members tell them every day “of the delays they face getting answers and action from HMRC”.
She said: “It is crazy that people trying to get help from HMRC on paying the right amount of tax find it so difficult to get through, especially when an estimated £3bn a year is lost to the Exchequer from non-deliberate taxpayer error.
“The first principle of compliance surely has to be making it easy for willing taxpayers to comply with their obligations.”
Christine Jardine, the Liberal Democrat Cabinet Office spokeswoman, said: “This government is losing absolutely staggering amounts of money through its incompetence and inability to collect the tax it’s owed.
“We need to see serious action to close this tax gap black hole.
“Ministers need to immediately get a grip on this situation, anything less would be a failure for millions of people who are struggling with the cost of living crisis.”
Britain’s most-wanted fugitive is still on the run – exactly 20 years after the fatal shooting of a young mother of three.
Kevin Parle is a suspect in the murder of Lucy Hargreaves, 22, who was shot dead at her home in Liverpool before the house was set on fire on 3 August 2005.
Since then, after many appeals for information, there has been no confirmed sighting, word or trace of him.
Two decades on, Ms Hargreaves’ family have had no justice. Two young men prosecuted for her murder had charges dropped when a judge ruled there was insufficient evidence against them.
In a statement marking the anniversary of her death, they said: “The way we lost Lucy is not something families can ever truly come to terms with – it is still incredibly difficult and painful to think about.
“Over the past 20 years, people will have talked with family and friends. A number of people were contacted by males using a phone that was stolen along with a vehicle used in Lucy’s murder.
“We appeal directly to them to please come forward. Now is the time.”
Image: Police prediction of how Kevin Parle has aged since 2005. Pic: Merseyside Police
Three men burst into Lucy’s home 20 years ago today, shot her dead as she slept on a sofa, and set alight the duvet she’d been sleeping under.
It’s believed the gang were looking for her boyfriend Gary Campbell, who was upstairs. He fled from a window with their two-year-old daughter and then tried in vain to save Ms Hargreaves.
Mr Campbell had allegedly been a passenger in a stolen car that had hit and killed a young boy 12 years earlier, supposedly the motive for the shooting. He denied he was in the car at the time.
Image: Ms Hargreaves with her three children
Howard Rubbery, head of the Serious Crime Review Unit at Merseyside Police said: “The family remain absolutely devastated by Lucy’s death.
“It’s important to note Lucy is an absolutely innocent victim. She’s not from a family of criminality. She wasn’t involved in criminality.
“The hunt for Kevin Parle is very much on, and we ask anybody with information, anybody who is close to Parle and knows where he is, to please come forward.
“There were three males responsible for this offence and we are looking for justice for Lucy’s family in relation to all three.
“I do believe that there are people out there who have yet to speak to the police, even though it’s 20 years on, who hold information that’s absolutely vital to our investigation.”
Police believe Parle, now in his 40s, fled to Spain where he hid among the vast expat community with criminal help.
Several years later, I tracked his movements to a holiday complex near Torrevieja, where staff convinced me he had stayed there for several weeks.
Image: Former detective Peter Bleksley says Parle is being protected
‘Huge value to organised crime’
Former Scotland Yard detective Peter Bleksley, who recently spent four years on a personal hunt for Parle, also visited the complex and said: “He was bold and he was brash and he had a girlfriend at one point.
“The police actually should have captured him there, but they were too late.”
He claimed he nearly caught up with Parle at a villa elsewhere in Spain, but spooked him into disappearing again.
Mr Bleksley hosted an award-winning podcast and wrote a book in which he chronicled his manhunt.
He said: “Kevin Parle has remained hidden because he is funded, protected, looked after and of huge value to global, serious and organised crime.”
Parle can’t be hard to spot – he’s well-built, 6ft 5in tall, red-haired with a face scar and, originally at least, has a Liverpool accent. Of course, he might be dead.
Mr Bleksley said: “I can think of many reasons why certain criminals would want to get rid of Kevin Parle because he could, in terms of evidence about the cases that he’s wanted for, should he flip and become a witness for the Crown, be highly damaging for a lot of very tasty criminals.”
Image: 16-year-old Liam Kelly was shot dead a year before Ms Hargreaves. Pic: Merseyside Police
Parle is also wanted in connection with the murder of 16-year-old Liam Kelly, who was shot dead over an alleged £200 debt in June 2004, a year before Lucy’s death. Parle was arrested and questioned, but then freed on bail.
There have been reports of the fugitive in Australia and Dubai, but nothing to corroborate any of them.
If he’s alive and if no one is prepared to shop him, what might lead to his capture?
“I think when he has a fallout with those who have guarded him, funded him, fed him, put a roof over his head and all of that, maybe even paid for his plastic surgery that could have altered his appearance,” Mr Bleksley said.
“When he finally has a fallout, when he’s no longer of use, then perhaps that will be the day that somebody goes, Peter, he’s here.”
Several demonstrators have been detained after rival groups faced off over a hotel accommodating asylum seekers in north London, with police breaking up brief clashes.
The Metropolitan Police has since imposed conditions on the protest and counter-protest outside the Thistle City Barbican Hotel in Islington.
The protest was organised by local residents under the banner “Thistle Barbican needs to go – locals say no”.
The group of several hundred people waved union flags and banners, and one man chanted: “Get these scum off our streets.”
Image: Anti-immigration protesters waved Union Jack flags. Pic: PA
A larger group staged a counter demonstration to voice support for asylum seekers, bearing a banner that read: “Refugees are welcome.”
People inside the hotel, believed to be migrants, watched on, with some waving and blowing kisses from the windows.
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Image: People believed to be asylum seekers waved the hotel windows. Pic: PA
Image: Pro-immigration protesters gathered by the Thistle City Barbican Hotel. Pic: PA
A man wearing an England football shirt was detained by police after getting into an altercation with officers.
There have been nine arrests so far, seven of which were for breaching conditions police put on the protests under the Public Order Act.
Rival groups separated by police
Another protest was scheduled in Newcastle on Saturday, outside The New Bridge Hotel, as anti-migrant sentiment ripples through some communities around the country, also flaring up recently in Epping.
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Last week: Protesters divided over migrant hotels
The counter-protest in London was organised by local branches of Stand Up To Racism, and supported by former Labour leader and Islington North MP Jeremy Corbyn.
Other community groups including Finsbury Park Mosque and Islington Labour Party were also involved.
Groups online that backed the original protest include “Patriots of Britain” and “Together for the Children”.
At one point, a large group of masked protesters dressed in black, calling themselves anti-fascists, appeared from a side street and marched towards the rival group outside the hotel.
The two groups briefly clashed before police rushed in to separate them.
Image: Pic: PA
Image: Supporters of local protest group ‘Thistle Barbican needs to go – locals say no’. Pic: PA
Why are asylum hotels used?
The government is legally required to provide accommodation and subsistence to destitute asylum seekers while their claims are being decided, most of whom are prohibited from working.
A jump in the use of hotels since 2020 has been attributed to the impacts of the COVID pandemic, a backlog in unresolved asylum cases, and an increase in the number of migrants crossing the Channel in small boats.
However, the number of asylum seekers living in hotels has fallen recently, from 38,079 at the end of 2024 to 32,345 at the end of March 2025, according to the Refugee Council.
How police tried to keep groups apart
The police imposed conditions on both groups in London to prevent “serious disorder” and minimise disruption to the community.
Those in the anti-asylum hotel protest were told to remain within King Charles Square, and to gather not before 1pm and wrap up by 4pm.
Those in the counter-protest were to required to stay in an area in Lever Street, and assemble only between 12pm and 4pm, but were still in eye and ear shot of the other group.
Chief Superintendent Clair Haynes, in charge of the policing operation, said: “We have been in discussions with the organisers of both protests in recent days, building on the ongoing engagement between local officers, community groups and partners.
“We understand that there are strongly held views on all sides.
“Our officers will police without fear or favour, ensuring those exercising their right to protest can do so safely, but intervening at the first sign of actions that cross the line into criminality.”
Meanwhile, the protest in Newcastle was promoted by online posts saying it was “for our children, for our future”.
The “stop the far right and fascists in Newcastle” counter-protest was organised by Stand Up To Racism at the nearby Laing Art Gallery.
A man has been remanded into custody charged with child cruelty offences after allegedly lacing sweets with sedatives.
Jon Ruben, 76, of Ruddington, Nottinghamshire, appeared at Leicester Magistrates’ Court on Saturday after youngsters fell ill at a summer camp in Stathern, Leicestershire.
He has been charged with three counts of wilfully assaulting, ill-treating, neglecting, abandoning or exposing children in a manner likely to cause them unnecessary suffering or injury to health.
The charges relate to three boys at the camp between 25-29 July.
Image: The scene in Stathern, Leicestershire. Pic: PA
Ruben spoke only to confirm his name, age and address.
Police received a report of children feeling unwell at a camp being held at Stathern Lodge, near Melton in Leicestershire, last Sunday.
Officers said paramedics attended the scene and eight boys – aged between eight and 11 – were taken to hospital as a precaution, as was an adult. They have since been discharged.
Police said the “owners and operators of Stathern Lodge are independent from those people who use or hire the lodge and are not connected to the incident”.
Leicestershire Police has referred itself to the Independent Office for Police Conduct, after officers initially reported the incident as having happened on Monday, only to later amend it to Sunday.
It is still unclear when officers responded and whether that is why the watchdog referral has been made.
Ruben will next appear at Leicester Crown Court on 29 August.