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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 Hunt announced 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.

The £42bn in unpaid taxes comes on top of the £4.5bn lost to fraud in COVID support schemes – of which HMRC only expects to recover a quarter.

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.”

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Storm Bert: Father rescues son from sinking car as floods wreak havoc

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Storm Bert: Father rescues son from sinking car as floods wreak havoc

Tragedy almost struck a family in West Yorkshire after a father had to suddenly rescue his 11-month-old son from their flooded car.

Andre Randles, 22, was driving with baby Luca from Hebden Bridge to his father’s home in Todmorden to watch a football match on Saturday afternoon.

He was diverted away from his main route when he hit a dip and went “straight into a puddle of water”.

Speaking to Sky’s Shingi Mararike, Mr Randles said he thought it was a shallow puddle that he could drive through but soon his car began to float.

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Paige and Andre
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Andre Randles’ partner Paige Newsome said the incident was ‘really scary’

He called emergency services but soon “water started seeping in”.

“I thought I’m going to have to get out, I’m going to have to smash a window,” Mr Randles said.

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He wound down his and his son’s windows, and climbed out before rescuing his son.

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‘Devastating’ flooding in Wales

“The water was chest high, I held him up as high as I could to keep him out of the water.”

“It wasn’t raining so heavily, I’ve driven in much worse rain,” he added.

Mr Randles, a self-employed roofer who relies on the car for work, said he remained calm during the ordeal and was helped by the fact that Luca was asleep during the rescue.

Mr Randles’ partner Paige Newsome – who was not in the car at the time – said the incident was “really scary”.

“To think I could have actually lost them both – I don’t know how I would’ve lived,” she said.

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Resident feels ‘abandoned’ in floods

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The road has been flooding for at least two decades, the couple said.

“What is it going to take for the council to sort it out? Does a fatal incident have to happen? It’s been going on for years,” Ms Newsome said.

The couple are worried about affording another car as well as Christmas celebrations.

But Mr Randles said: “I’m grateful that we got out safely and that we can spend his first birthday and Christmas as a family.”

Storm Bert has brought more than 80% of November’s average monthly rainfall in less than 48 hours to some parts, the Met Office said.

Around 300 flood warnings and alerts are in place in England, with another 100 in Wales and nine in Scotland, as heavy rain and thawing snow bring more disruption across the UK.

A major incident was declared by Rhondda Cynon Taf County Borough Council in South Wales after homes and cars were submerged in water.

‘It is devastating’

Gareth Davies, who owns a garage in Pontypridd, a town in Rhondda Cynon Taf, told Sky’s Dan Whitehead that flooding has put his small business “back to square one”.

As the River Taff burst its banks, the majority of the vehicles in Mr Davis’s garage were so damaged he says they will have to be written off.

Garage in wales destroyed by Storm Bert
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Mr Davies speaking to Sky’s Dan Whitehead in his flooded garage

Garage in wales destroyed by Storm Bert

“I am gutted,” he said, standing in his flooded garage, most of which is also covered in oil after a drum tipped over.

“How long is it going to take to sort out? I am going to lose money either way. I can’t work on people’s cars when I am trying to sort all of this out.

“It is devastating.”

Mr Davies said he has never had an issue with water coming into his garage until now.

Garage in wales destroyed by Storm Bert

Pointing to one car that had been hoisted into the air before water reached it, he said: “Lucky enough, I did come in this morning just to get that car up in the air.

“I don’t know what to say, I have been working flat out for two years to build this up and something like this happens, and it just squashes it all.

“This has put me back to square one.”

At least two to three hundred properties in South Wales have been affected by flooding, Councillor Andrew Morgan, leader of Rhondda Cynon Taf Borough Council, said on Sunday.

He said the affected buildings are a mixture of residential and commercial properties, after the weather turned out to be worse than what was forecast.

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MP behind assisted dying bill says she has ‘no doubts’ – as she rejects minister’s ‘slippery slope’ claim

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MP behind assisted dying bill says she has 'no doubts' - as she rejects minister's 'slippery slope' claim

The Labour MP behind the assisted dying bill said she has “no doubts” about its safeguards after a minister warned it would lead to a “slippery slope” of “death on demand”.

Kim Leadbeater told Sky’s Sunday Morning With Trevor Phillips that she has “huge respect” for Justice Secretary Shabana Mahmood, but that she doesn’t agree with her opinion.

In a strongly worded intervention ahead of Friday’s House of Commons vote, Ms Mahmood said the state should “never offer death as a service”.

She said she was “profoundly concerned” by the legislation, not just for religious reasons, which she has previously expressed, but because it could create a “slippery slope towards death on demand”.

Asked about the criticism, Ms Leadbeater said: “I have got a huge amount of respect for Shabana. She’s a very good colleague and a good friend.

“In terms of the concept of a slippery slope, the title of the bill is very, very clear.

“It is called the Terminally Ill Adults (End of Life) Bill. It cannot include anybody other than people who are terminally ill, with a number of months of their life left to live. It very clearly states that the bill will not cover anybody else other than people in that category.”

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Ms Leadbeater’s bill proposes legalising assisted dying for people with six months left to live, on the approval of two doctors and a High Court judge.

She wants people who are in immense pain to be given a choice to end their lives, and has included a provision in the legislation to make coercion a criminal offence.

The matter will be debated for the first time in almost 10 years on Friday, with MPs given a free vote, meaning they can side with their conscience and not party lines.

As a result, the government is meant to remain neutral, so the intervention of cabinet ministers has provoked some criticism from within party ranks.

Labour peer Charlie Falconer told Sky News Ms Mahmood’s remarks were “completely wrong” and suggested she was seeking to impose her religious beliefs on other people.

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Kevin Hollinrake says he will be in favour of the assisted dying bill

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Mum diagnosed with cancer tells of the day her life changed ahead of assisted dying vote

Why is assisted dying so controversial and where is it legal?

Asked about his comments, Ms Leadbeater said it was important to remain “respectful and compassionate throughout the debate” and “for the main part, that has been the case”.

She added: “The point about religion does come into this debate, we have to be honest about that. There are people who would never support a change in the law because of their religious beliefs.”

Ms Leadbeater went on to say she had “no doubts whatsoever” about the bill, which has also been objected by the likes of Health Secretary Wes Streeting and former Labour prime minister Gordon Brown.

Asked if she has ever worried about people who don’t want to die taking their own lives because of the legislation, Ms Leadbeater said: “No, I don’t have any doubts whatsoever. I wouldn’t have put the bill forward if I did.

“The safeguards in this bill will be the most robust in the world, and the layers and layers of safeguarding within the bill will make coercion a criminal offence.”

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Mum diagnosed with cancer tells of the day her life changed ahead of assisted dying vote

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Mum diagnosed with cancer tells of the day her life changed ahead of assisted dying vote

There is a lot at stake this week for Sophie Blake, a 52-year-old mother to a young adult, who was diagnosed with stage four cancer in May 2023.

As MPs vote on whether to change the law to allow assisted dying, Sophie tells Sky News of the day her life changed.

“One night I woke up and as I turned I felt a sensation of something in my breast actually move, and it was deep,” she says, speaking from her home in Brighton.

“Something fluidy, a very odd sensation. I woke up and made a doctor’s appointment.”

Sophie underwent an ultrasound followed by a biopsy before she was taken to a room in the clinic and offered water.

“They said, ‘a hundred percent, we believe you have breast cancer’.”

But it was the phone call with her mother that made it feel real.

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“My mum had been waiting at home. She phoned me and said ‘How is it darling?’ and I said ‘I’ve got breast cancer,’ and it was just that moment of having to say it out loud for the first time and that’s when that part of my life suddenly changed.”

Sophie says terminal cancers can leave patients dreading the thought of suffering at the end of their lives.

“What I don’t want to be is in pain,” she says. “If I am facing an earlier death than I wanted then I want to be able to take control at the end.”

Assisted dying, she believes, gives her control: “It’s an insurance policy to have that there.”

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Why is assisted dying so controversial and where is it legal?
UK on ‘slippery slope’ Justice Minister says ahead of vote

On Friday, the government is set to debate the issue before voting on it. Sophie hopes they’ll back the proposal.

“It should be my choice to be able to have a compassionate death,” she says.

There has been much debate about the bill since details about how it would work were published earlier this month.

On Friday, former prime minister Gordon Brown became the latest senior political figure to share his opinion on the matter, coming out as against the legalisation of assisted dying, based on his experience of his own daughter’s death.

Disability rights advocate Lucy Webster warns that for people like Sophie to have that choice, others could face pressure to die.

Lucy Webster, disability rights advocate
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Lucy Webster

“All around the world, if you look at places where the bill has been introduced, they’ve been broadened and broadened and broadened,” she tells Sky News.

Lucy is referring to countries like Canada and Netherlands, where eligibility for assisted deaths have widened since laws allowing it were first passed.

Lucy, who is a wheelchair user and requires a lot of care, says society still sees disabled people as burdens which places them at particular risk.

“I don’t know a single disabled person who has not at some point had a stranger come up to us and say, ‘if I were you, I’d kill myself’,” she says.

The assisted dying bill, she says, reinforces the view that disabled lives aren’t worth living.

“I’ve definitely had doctors and healthcare professionals assume that my quality of life is inherently worse than other people’s. That’s a horrible assumption to be faced with when [for example] you’ve just gone to get antibiotics for a chest infection. There are some really deep-seated medical views on disability that are wrong.”

Under the plans, a person would need to be terminally ill and in the final six months of their life, and would have to take the fatal drugs themselves.

Among the safeguards are that two independent doctors must confirm a patient is eligible for assisted dying and that a High Court judge must give their approval. But the bill does not make clear if that is a rubber-stamping exercise or if judges will have to investigate cases including risks of coercion.

Julian Hughes, honorary professor at Bristol Medical School, says there’s a very big question about whether courts have the room to take on such a task.

Julian Hughes, honorary professor at Bristol Medical School
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Julian Hughes

“At the moment in the family division I understand there are 19 judges and they supply 19,000 hours of court hearing in a year, but you’d have to have an extra 34,000,” he explains.

“We shouldn’t fool ourselves and think that there wouldn’t be some families who would be interested in getting the inheritance rather than spending the inheritance on care for their elderly family members. We could quickly become a society in which suicide becomes normalised.”

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