First, David Cameron is admitting when saying this that there is a massive shadow economy. It’s just a shame HMRC does not do so when preparing its tax gap data, which is largely populated with “illustrative estimates” in this area, which are otherwise known as guesswork that massively understated the issue to save embarrassment to HMRC’s management. I, of course, do somewhat better in my own approach to the issue.

Second, Cameron admits in saying this that illegal immigration is not a supply fed issue: it is not, in other words, people turning up unwanted on the UK’s shores but is instead fuelled by UK employers seeking to engage immigrant workers. The announcement on this issue does, however, fail to recognise that.

Third, this means that these people are being exploited for gain by employers in the UK. Shall we recognise who are exploiting and who are being exploited here?

Fourth, the whole emphasis is upon seizing the wages of the employee. What about seizing the profit of the employer who is at least as guilty of handling the proceeds of a crime?

Fifth, most of these employers will be dodgy limited companies. Many will exist behind nominees. They will never file accounts. They will never pay tax.

Source: Tax Research UK » David Cameron won’t beat illegal immigration until he tackles the shadow economy