The HM Revenue and Customs has published the latest estimates of the TAX GAP.
The headline tax gap estimates are:
- the UK tax gap in 2022 to 2023 is estimated to be 4.8% of total theoretical tax liabilities, or £39.8 billion in absolute terms, which means HMRC collected 95.2% of all tax due
- there has been a long-term reduction in the tax gap as a proportion of theoretical liabilities: the tax gap reduced from 7.4% in the tax year 2005 to 2006 to 4.8% in the tax year 2022 to 2023
- the tax gap for VAT reduced from 13.7% in 2005 to 2006 to 4.9% in 2022 to 2023
- the tax gap for Income Tax, National Insurance contributions (NICs) and Capital Gains Tax gap reduced from 4.5% in 2005 to 2006 to 3.0% in 2022 to 2023
- the tax gap for Corporation Tax increased from 11.4% in 2005 to 2006 to 13.9% in 2022 to 2023
- the tax gap for excise duties reduced from 8.3% in 2005 to 2006 to 4.7% in 2022 to 2023
- the largest components of the tax gap by tax type are the Corporation Tax gap and the Income Tax, NICs and Capital Gains Tax gap, both at a 34% share, followed by the VATgap with a 20% share of the overall tax gap
- the tax gap from small businesses is the largest component of the tax gap by customer group at a 60% share in 2022 to 2023; the tax gap from wealthy and individuals each make up a low proportion of the tax gap at 5% each in 2022 to 2023
PAYadvice.UK 23/3/2025