A new study has suggested that the UK Treasury could be forgoing some £40 billion in tax revenues per year as a result of the existence of the so-called ‘black economy,’ the equivalent of 12p on the basic rate of income tax.
According to research conducted by the Economic Journal, published by the Royal Economic Society, work undertaken by the self-employed in the black economy amounts to more than 10% of the total value of the UK economy, or about £100 billion.
By comparing what the self employed spend with their declared income, the researchers calculated that blue collar self-employed workers report less than half of their income, whilst equivalent white collar workers declare 61p in every pound earned.
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