HMRC have confirmed that the Tax Gap for 2017-2018 is 5.6%. This shows a reduction of 1.6% from 2005-2006.
This means that HMRC have successfully collected 94.4% of all tax due under the law in 2017-2018.
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 Tax Gap is worth over £9.9 billion a year and it is estimated that £3 billion of this is attributed to VAT. In a bid to close this gap further HMRC have launched Making Tax Digital this year, this applies to VAT registered businesses, with turnover above the £85,000 threshold. The new system will require digital records to be kept and the VAT returns to be submitted using compatible software.
The improved accuracy of the digital records being submitted directly to HMRC will reduce the avoidable errors made by businesses and reduce the tax lost.
Since 2010 HMRC have also secured and protected over £200 billion in extra tax that may of otherwise gone unpaid as a result of tax evasion, avoidance and noncompliance tactics.
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