East Anglia: BDO study reveals soaring fraud levels
PUBLISHED: 12:58 13 January 2013 | UPDATED: 09:20 14 January 2013
FRAUD in the East of England totalled £37.5million las year, compared with just £3.6m in 2010, according to BDO’s annual Fraud Track research.
The accountancy and business advice firm’s analysis, which examines all reported fraud over £50,000, identified 24 cases in the region.
And Richard Shave, forensic director at BDO in the East of England, said there was still concern that most business fraud was not reported, with business owners unwilling to involve the police unless absolutely necessary.
“With that in mind, the true cost to the region is likely to be even higher,” he added.
“There are many large corporates based in the East of England that are vulnerable to fraudsters and taking advantage of their internal control weaknesses.
“Most frauds could be prevented by some simple and robust control measures that are far too often overlooked in the race for increased revenues and profits.”
Across the UK, the value of total reported fraud in 2012 has fallen by a third to £1.37billion. However, tax fraud, totalling £603m alone, has doubled in the last two years.
This year’s Fraud Track figures show that VAT fraud alone accounts for 41% of the total UK fraud figure. The current UK VAT gap – the theoretical difference between what the Government expects to collect in sales tax and what it actually collects – is around £10bn, with fraud accounting for approximately one third of this figure.
That equates to £3.3bn missing from the public purse every year, which BDO says is equivalent to at least 1p off the effective rate of tax for every UK taxpayer.
Mr Shave added: “The fact that tax fraud, and VAT fraud in particular, accounts for such a high proportion of overall fraud suggests that this is an area which would benefit from greater resources at HMRC.”
Having dominated fraud figures in the last few years the finance and insurance sector appears to have made substantial strides towards combating fraud, reporting its lowest level of fraud in five years at almost £500,000 in 2012.
Topping the tables as the industry most susceptible to fraudulent activity is public administration (£615m).