office@ajrandco.co.uk

01296 738 668

Tax gap remains steady at 5.1%

The tax gap for the 2020 to 2021 tax year is 5.1%.

Statistics published on the 23 June 2022 by HM Revenue and Customs (HMRC) reveal the estimated tax gap for the 2020 to 2021 tax year is 5.1% – the second lowest recorded percentage – and is unchanged from the previous year.

The annual Measuring Tax Gaps publication estimates the difference between the total amount of tax expected to be paid and the total amount of tax actually paid during the financial year. The majority of taxpayers pay the tax that is owed.

In monetary terms, the tax gap for the 2020 to 2021 tax year is £32 billion. At 5.1%, there has been no change in the percentage tax gap compared to the previous year, although the monetary value has fallen by £2 billion from £34 billion in the 2019 to 2020 tax year.

The total tax due to be paid fell from £672 billion in 2019 to 2020 to £635 billion in 2020 to 2021 due to the economic impact of COVID-19.

The vast majority of taxpayers and businesses paid the correct amount of tax owed. We want to help everyone to get their tax right as the revenue we raise helps fund our vital public services.

Jonathan Athow, HMRC’s Director General for Customer Strategy and Tax Design

The estimate for the 2020 to 2021 tax gap is the best assessment based on the evidence available at this time. There is some uncertainty for the tax gap estimates for the first year of the pandemic and estimates could be subject to revisions in future years.