Tax Gap Remains Low

tax

HMRC has published a report showing that the UK tax gap in 2017/18 is estimated to be ยฃ35 billion.

 This is 5.6% of total theoretical tax liabilities, and a small increase of 0.1% from 5.5% in 2016/17. HMRC therefore secured 94.4% of all tax due.

The tax gap is the difference between the amount of tax that should be paid to HMRC compared to what is actually paid. Further details in the report show:

  • the overall tax gap has fallen from 7.2% since 2005/06
  • the duty-only excise tax gap has reduced from 8.4 % in 2005/06 to 5.1% in 2017/18.
  • the corporation tax gap has reduced from 12.5% in 2005/06 to 8.1% in 2017/18.

Jesse Norman MP, Financial Secretary to the Treasury, said:

‘The UK’s low tax gap underlines both how the vast majority of people are paying the correct amount of tax, and how effective HM Revenue and Customs has been in its efforts to clamp down on tax evasion and avoidance.’

The report advises that the majority of taxpayers want to get their tax right, but many are still finding this hard, with avoidable mistakes costing the Exchequer over ยฃ9.9 billion a year. HMRC advise that ยฃ3 billion of this is attributable to VAT alone.

With the introduction of Making Tax Digital (MTD) for VAT, HMRC anticipates that the tax lost due to avoidable errors will be reduced because of the improved accuracy that digital records provide.

Internet link: GOV.UK news 

Let’s start a conversationย 

    Subscribe me for updates and news from In Accountancy

    Related articles

    Find out how we can help?

    Lectus scelerisque a donec tincidunt litora per eleifend eget ut sagittis conubia pharetra scelerisque dui ultricies duis parturient auctor adipiscing.

    ย 

    Let’s start a conversationย 

      Subscribe me for updates and news from In Accountancy

      In Accountancy Logo

      IN-ACCOUNTANCY

      Search
      IN-Accountancy
      Privacy Overview

      This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.