As accountants in the Stockport area, we pay very close attention to all tax news, especially news encompassing tax gap decreases. The Office for National Statistics has announced that the UK tax gap fell 6.5% in 2014/15 which is the lowest ever level recorded.
The press release confirms that the UK tax gap, the difference between the amount of tax due and the amount collected, is one of the lowest in the world.
HMRC have reduced the tax gap from 8.3% in 2005/06. If the tax gap had remained at the 2005 to 2006 level of 8.3%, it would have grown to £47 billion and the country would have been £11 billion a year poorer.
HMRC believe that the tax gap has fallen, in part, due to digital reporting. In particular Real Time Information reporting for the PAYE system has led to more accurate recording of information on payroll taxes, and the shift to VAT online has helped bring the VAT gap in 2014/15 to its lowest level of 10.3% (£12.7 billion).
The Financial Secretary to the Treasury, Jane Ellison said:
‘This government is committed to tackling tax evasion and avoidance wherever it occurs. The UK has one of the lowest tax gaps in the world. By investing £1.8 billion since 2010 in boosting HMRC compliance capabilities, we’ve brought our tax gap down to its lowest ever level. And to make it even easier for people to pay the right tax in the future, we’ve invested £1.3 billion in new digital tools.’
Internet link: GOV.UK