Posted by jonathanfullarton - August 3, 2023 12:27 pm Latest Tax Gap figures

HMRC release latest tax gap figures

HMRC has issued a press release which estimates the 2021-22 tax year tax gap to be 4.8%. The tax gap is HMRC’s estimated calculation of the total tax payments versus what the revenue actually received. In theory, the UK tax system should have netted £739.3 billion revenue. However, the actual amount HMRC collected was £703.5 bn, a shortfall of £35.8 bn.

Reduction in tax gap

HMRC have been working to reduce the tax gap for many years and use the tax gap to provide a clearer insight of tax compliance year-on-year.

Where are the biggest gaps?

According to the press release the largest areas for gaps come under Income Tax, National Insurance Contributions, Capital Gains Tax and Corporation Tax.

The tax gap for individuals and the wealthy are 6% and 5% respectively, whereas the largest customer group for tax gaps are small businesses, which made up 56% of the tax gap in 2021-22.

More information about tax revenues and the tax gap can be found on the GOV.UK website.

How our tax teams can help

Taxation can be a complicated subject and many small businesses will find it difficult to keep track or all the rules and regulations in order to remain compliant. They may also not be aware of all the tax allowances that apply to them so could even be paying more tax than their fair share.

Our tax teams are on hand to ensure you and your business remains compliant and that you receive the benefit of any tax allowances for you, your business and your family.

Our tax advisors will explain your tax liabilities in clear and concise terms so that you always have a clear picture of your tax liabilities to help you with all your tax planning. For more information on our tax services please click here.

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