Tax fraud is now double the level it was in 2010, research by accountancy and business advisory group BDO has revealed.

According to the BDO's report, tax fraud cost the UK £603m last year, compared to £309m just two years earlier.

Total fraud in 2012 declined to £1.37bn from £2.1bn a year earlier, with 44% 2012's figure made up by tax fraud - a level not seen in 2007. 41% was specifically VAT fraud.

The report's author, Simon Bevan, said that: "Politicians and the public at large are presently pointing their finger at various multinationals for allegedly not paying the correct amount of corporation tax.

"However, our latest survey of UK fraud shows that, in reality, it is the fraud element of UK's VAT gap - the theoretical difference between what the government expects to collect in sales tax and what it actually collects - that is the bigger drain on the public purse."

The report added that the problem spreads across the EU, with the collective VAT gap for the 27 member states totalling €100bn. In the UK alone, the VAT gap was £10bn.

"These two types of serious VAT fraud are committed by professional criminals, rather than reckless ad hoc amateurs. That VAT fraud accounts for such a high proportion of overall fraud is a function of a significantly under-resourced HMRC," Bevan added.

The HMRC recently launched a tax evasion campaign into which it has injected significant funds to enable it to recover large amounts of unpaid taxes.

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