It is estimated that Revenue & Customs' IT systems in the UK fail to detect 98.5 per cent of cases of tax evasion in UK, leaving the Exchequer short of at least £2 billion every year.

From this it is estimated that two million people in the UK evade taxes. Even more galling for the authorities is the fact that the evaders have very small chance of being caught, according to the Committee of Public Accounts, a powerful body of MPs that oversees government spending, in a new report entitled 'HMRC: Tackling the hidden economy'.

The report also reveals that only 1.5 per cent of the evaders get caught and the penalties imposed are relatively less.

The report has highlighted the fact that a large percentage of those who do not pay taxes comprise white-collar professionals like lawyers surgeons and property developers. The report reveals that Revenue and Customs has caught 57 barristers evading hundreds of thousands of pounds in tax.

Amongst these, 36 people have agreed to pay a total of £605,000 in unpaid taxes and fines while another 21 barristers are still being investigated. Startlingly, a majority of middle class tax evaders have not been prosecuted.

Also self-employed builders and interior designers have been found out to be amongst the worst offenders for failing to declare their full earnings to the 'commons public accounts committee'.

The committee also found that 80 per cent of those not paying taxes owed small relatively small amounts as tax, but the total added up to a significant amount. Another area of concern are individuals trading on the internet through auction sites such as ebay.

Edward Leigh, the PAC chairman said the penalties imposed on culprits are very low being on an average only 3 per cent of the tax detected and in just two out of 1,000 cases is a prosecution launched.

Though HMRC can force tax evaders to pay all of the tax owed, in most cases it either imposes a lower penalty or waives it altogether. The government has invested £41 million in 2006 to 2007 to improve detection, impose sanctions, and publicise the need for cash-in-hand workers to declare all their earnings.

The report reveals that 30,000 cases a year have been uncovered since 2003-04 - detection rate of just 1.5 per cent. However 11,900 cases that were detected through tip offs to the Tax Evasion hotline last year are still pending.