UK government urged to crack down on illicit finance ahead of hosting major international summit
At least £325 billion of dirty money from financial crime, money laundering, corruption, illegal trade and tax dodging flows through the UK every year, according to a new report by the Finance Innovation Lab. This is equivalent to more than 10% of UK GDP and shows that the UK remains a central hub for the flow of dirty money globally.
When the UK’s Crown Dependencies and Overseas Territories – places such as Jersey and the Cayman Islands – are included, the total rises to more than £788 billion annually.
The findings underline the UK’s central role in global finance, and its vulnerability as a hub for illicit money. With the UK set to host a major international Illicit Finance Summit in 2026, the report urges ministers to demonstrate leadership by confronting the City of London’s role in enabling economic crime and tax evasion.
These shocking numbers are included in new research from the Finance Innovation Lab, and are the first comprehensive attempt to quantify the scale of illicit financial flows (IFFs) linked to the UK, bringing together data on cross-border tax evasion and financial crime.
Jesse Griffiths, one of the authors of the report, said “Rachel Reeves has described the UK’s financial sector as the ‘crown jewel’ of the economy. Our report shows that, all too often, it is in fact playing a central role in supporting illicit financial flows: harming our economy, taking money from our public services, and supporting crime. Understanding the true scale of this is an essential first step toward ensuring the financial system works for society, not against it.”
Public concern is already high: nearly nine in ten voters want the government to take economic crime seriously, yet fewer than half believe it currently does. Meanwhile, the analysis estimates that at least £26 billion a year is lost to tax dodging – funds that could otherwise support public services and investment.
The research has been backed by a cross-party group of MPs, who have joined in calling for stronger action to tackle illicit finance.
Baroness Margaret Hodge, the government’s Anti-Corruption Champion and former Chair of the Public Accounts Committee, said “We know that illicit finance is a scourge that has serious impacts for the UK, as it does for countries around the world. Nonetheless, it is truly shocking to see these new figures highlighting the sheer scale of the problem here. It’s a global issue, and requires global cooperation, but the UK has a central role to play, and this new research is a welcome reminder that we must redouble our efforts”
Phil Brickell MP, Chair of the All Party Parliamentary Group on Anti-Corruption and Responsible Tax, said “This important report lays bare the sheer scale of illicit finance flowing through the UK. Each and every penny of that £325 billion could be drug money laundered, sanctions avoided or tax dodged. The Government’s Countering Illicit Finance Summit will be a hugely important milestone for this country. After years of inaction from previous governments it is time for us to become part of the solution, not part of the problem.
“It’s time to give our enforcement agencies the resources they need to crack down on the scourge of economic crime, and for key UK Overseas Territories to finally lift their veil of corporate secrecy”.
Sir Andrew Mitchell MP, Vice Chair of the APPG, said “The UK is at the centre of a global spider’s web of dirty money. It is frankly outrageous that UK linked tax havens are continuing to take so many billions out of the public coffers of countries around the world, including many of the world’s poorest. This is money that should be funding schools and hospitals, but is instead being stashed offshore. It’s equally outrageous that UK professional enablers are helping to make it all possible. The upcoming Illicit Finance Summit must be a line in the sand, when we say that enough is enough, and finally act to end this secrecy and corruption. If overseas territories and crown dependencies want to be part of the British family they must abide by our laws and moral values”.
The report sets out three priority areas for immediate action:
- Crypto regulation: Recognising the growing money-laundering risks posed by cryptocurrencies and pressing pause on plans to position the UK as a global crypto hub.
- UK-linked tax havens: End the role of Overseas Territories such as the British Virgin Islands in facilitating secrecy by requiring full transparency over the real owners of shell companies.
- Enforcement: Properly resource agencies including the National Crime Agency and the Serious Fraud Office, with increased funding likely to pay for itself through higher fines and asset seizures.
Because illicit finance is inherently hidden, the report adopts cautious assumptions and draws on the most reliable available data. Even so, it concludes that the UK remains a major node in global illicit financial flows.
ENDS
Notes to editors:
- The report uses the UN definition of illicit financial flows: funds that are illicit in origin, transfer, or use, and which cross national borders.
- Drawing together studies and estimates from multiple sources, the report estimates the total scale of illicit finance passing through the UK and its linked territories, including tax evasion and profit shifting by multinational corporations and offshore wealth, alongside estimates of money laundering associated with criminal activity.
- Beyond cross-border flows, the report also highlights “dirty money” within the domestic economy, including fraud, corruption, and proceeds of crime, warning that gaps in data continue to obscure the full picture. Estimates are based on a combination of official statistics and independent research and are likely to understate, rather than overstate, the true scale.
- Public perception data comes from the UK Anti Corruption Coalition: https://www.ukanticorruptioncoalition.org/2024-polling-reports/public-reflections-economic-crime