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Tackling the tax gap
Key points
- HMRC estimates that the tax gap is £39.8bn or 4.8% of total theoretical tax liabilities primarily caused by small businesses.
- HMRC’s annual accounts reported increased compliance yield from enquiries and other activities to tackle non-compliance.
- However tax under consideration by HMRC’s large business and WMBC teams increased again to 31 March 2024.
- While HMRC will continue its efforts to prevent non-compliance and promote compliance HMRC is expected to devote increased resources to compliance checks and investigations.
Understanding the tax gap is crucial for HMRC. These statistics indicate which taxpayers cause the most issues and reasons why taxpayers do not declare and pay the tax on time. Statistics published with HMRC’s annual report provide insights into HMRC’s 2023-24 compliance activities – its efforts to tackle the tax gap – and the areas perceived to pose greatest risk (tinyurl.com/hmrcfistechnote).
HMRC’s compliance...
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