Tax gap falls to lowest recorded rate

The UK tax gap for 2018-19 was estimated to be £31bn which is 4.7% of theoretical tax liabilities. This is a decrease from 2017-18 when the percentage was 5%. HMRC states the gap has been reducing over the past 14 years from 7.5% in 2005-06.

As in previous years HMRC attributes most of the gap to small businesses (43%) with large businesses responsible for 17%. Criminals are the third largest component making up 14% of the gap.

This is the first year that a stand-alone tax gap for wealthy taxpayers – defined as an individual with an income of more than £200 000 or assets of more than £2m – has been included in the report. This stands at £1.7bn and represents a very high collection rate of all tax due within this group. It is the smallest proportion of the total gap by...