Monday, 28 October 2013

The Tax Gap.

According to the HMRC the tax gap, which is the difference between what the Revenue reckon they should receive in tax and what they actually received is down in 2011/2012 to 7% or £35 billion a year. In other words the Revenue believe they are collecting 93% of what is owed to them.

The Revenue break down the missing billions as follows:


  • £5.4bn is lost through the hidden economy                         
  • £5.1bn through tax evasion;                                            
  • £4.7bn via criminal attacks;                                             
  • £4bn through avoidance;                                                
  • £4.4bn as a result of non-payment;
  • £4.3bn as a result of differences in legal interpretations;     
  • £4.3bn as a result of ‘failure to take reasonable care
  • £2.9bn is lost through error.
The HMRC further believe that £16.7 billion of missing tax is attributable to Small & Medium Enterprises (SME's) and only £8.8 billion from large corporations with the rest being due from individuals and criminals.

It would be interesting to find out if there has been any 'independent' research done into the 'tax gap'.

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