Claim about the costs of asylum support, benefit fraud and tax avoidance is Mostly False

The cost of asylum support in the UK has become a febrile issue against a backdrop of a rising number of protests outside hotels, where people seeking asylum are being accommodated by the Home Office.

In response, a meme has been widely circulating on social media, which suggests benefits for asylum seekers cost much less than either benefit fraud/error and tax avoidance. It questions why these issues are not more high profile amongst “the right wing”.

CLAIM:

Asylum seeker benefits cost £60m/year, equivalent to £2/year per taxpayer

Benefits fraud/error cost £3BILLION/year, £100/year per taxpayer

Tax avoidance costs £90BILLION/year, £3000/year per taxpayer

Why are the Right-Wing only screaming about the first one?

Ferret Fact Service looked at this claim and found it Mostly False.

‘Asylum seeker benefits cost £60m/year, equivalent to £2/year per taxpayer’.

This image came from a post on Twitter (now X) which was posted in August 2020, and has circulated for several years, so many of the figures used are out of date.

But according to the most recent National Audit Office report, in 2023-24, the Home Office spent £4.7bn on asylum support, of which £3bn was spent on housing people seeking asylum in hotels. This is compared to a total of £3.6bn spent on asylum support in 2022-23, a rise which was due to an increased use of hotels.

Under the immigration and asylum act, accommodation is available to those who are claiming asylum and can prove they would otherwise be destitute. Since 2019 the Home Office has subcontracted three private companies – Clearsprings Ready Homes (Clearsprings), Mears Group (Mears) and Serco – who have block booked hotels and provided meals.

Use of hotels, which first started in Scotland during the pandemic, has been escalating nationwide in recent years. As of December 2024, approximately 110,000 people seeking asylum were being accommodated across the UK, with about a third of them in hotels.

People in catered accommodation while seeking asylum get benefits worth £9.95 per week.

Asylum seekers accommodated in flats receive £49.18 per week, just over half of the £92.34 per week in Universal Credit available under the mainstream UK benefit system.

There were an estimated 37.4m tax payers in the UK in the tax year 2024-25.. The Home Office does generate income through visa and passport fees. Last year this totalled £5.8bn, though this has associated costs. It also relies on a treasury grant, which is funded by tax payers.

But based on simple division, asylum support would cost £125.67 per year per tax payer if housing costs are included.

‘Benefits fraud/error cost £3BILLION/year, £100/year per taxpayer‘

According to the latest figures from the Department of Work and Pensions (DWP), the total spend on overpaid benefits, either due to fraud or error, was £9.5bn in 2024-2025. That’s 3.3 per cent of the total amount paid out in benefits. It is a slight reduction on the previous year, when the total was £9.7bn.

Benefit fraud can involve making a claim for benefits you are not entitled to, claiming for more than you are entitled to or failing to tell authorities about a change in circumstances that mean you are no longer entitled to benefits. This can be carried out by both individuals and organised fraud gangs.

However the DWP figures reveal that benefits were also underpaid in about 0.4 per cent of cases, making a total of £1.2bn in 2025 with a slightly lower total of £1.1bn in 2024.

Think tank Policy in Practice estimates that the total amount of benefits that is unclaimed – because people do not apply – is now £22.7bh a year.

Based on simple division, the cost of benefit fraud and overpayment alone, without factoring in underpaid or unclaimed benefits, is £254 per year for each taxpayer.

According to HM Revenue and Customs the UK tax gap in 2023-2024 is estimated to be 5.3 percent of total theoretical tax liabilities across the country. This equates to a total figure of £46.8bn.

The biggest component of that gap by tax type is corporation tax, with an estimated 15.8 per cent not paid in 2023-2024. Corporation tax is paid to the government by UK companies and foreign companies with UK offices.

Tax evasion, which involves criminal means, is calculated separately. Though it is estimated at £5.5bn, this figure is likely to be a vast underestimate according to a Public Accounts Committee report from February, which claims loopholes in the current system make it “all too easy” for fraudulent behaviour to go undetected.

‘Tax avoidance costs £90BILLION/year, £3000/year per taxpayer‘

The report condemned the “lack of curiosity shown by HMRC to investigate the issue”. HMRC criminal investigations have reduced from 749 in 2018-19 to 344 in 2023-24.

Based on simple division, the tax gap – underpaid tax revenue not including evasion – costs £1,251.34 each year per tax payer. If evasion was to be included the total figure would be likely to be much higher.

Comparing the figures

The cost of asylum support is by far the most high profile of the three issues in the current debate with Reform UK’s leader Nigel Farage suggesting the rising costs are connected to the UK’s “economic decline”.

But both the Conservative Party and Reform UK have also claimed they would “crack-down” on benefit fraud.

Ahead of last year’s election the Conservatives said they would aim to raise £6m by tackling tax avoidance and evasion.

In June Nigel Farage suggested Reform will bring in a policy to allow “non doms” – people who live in that country but are not legally domiciled here – could pay a fee of £250,000 in order to exempt them from some UK taxes.

Ferret Fact Service verdict: Mostly False

The claim contains a kernel of truth, because the cost to the UK taxpayer from tax avoidance is about ten times that from asylum benefits, while benefit fraud costs twice as much.

However, all of the figures are out of date and incorrect, most noticeably the cost of asylum benefits which have escalated rapidly due to the rising cost of hotels. Costs associated with asylum support do feature most prominently in public debate, despite the fact that they have the lowest burden on the tax payer.