Re: Ouch!
"HMRC is actually relatively effective at collecting tax"
There are a few variables at play but it comes down to:
How much tax is collected.
How much it costs to collect it.
New Zealand dramatically simplified its tax structure in 1984-5 and lowered most tax rates, the government expected a lowering of overall taxation take by about 20%
The simplification removed a LOT of exemptions and various shit which was tying up tax staff in knots and made for a 40 page tax return. (The new one was 5 pages). Higher income earners ended up paying more tax as most of their loopholes were closed whilst low-middle earners paid the same or less (many low earners ended up paying none at all)
HOWEVER, the cost of collecting tax was reduced dramatically, as was the number of staff required to collect it - resulting in the tax department of 1991-2 being 2/3 or less the size of the one of 1984, and that reverses a problematic trend in government departments where they keep accreting staff over time no matter what their function is, but treasury-related ones are never cleaned up.
The interesting part was that by making things uncomplicated the government had more to spend but so did the majority of the population and they did so.
(NZ has undone most of the simplification since 1998 thanks to special interests, but a point has been proven.)
In the UK, there are something like 30-50,000 people chasing far less than £1billion of benefit fraud, whilst HMRC only has 1500 chasing £30-150billion (depending whose figures you believe) of tax fraud.
What's the cost-benefit of that?