Tax gap for 2023-24 rises to £46.8bn

The UK tax gap for 2023-24 was estimated to be £46.8bn or 5.3% of theoretical tax liabilities which were £876bn according to HMRC data.

HMRC states that there has been a long-term reduction in the tax gap as a proportion of theoretical liabilities – reducing from 7.4% in the tax year 2005-06 to its current level of 5.3%.

Pointing the finger of blame at small businesses HMRC says these represent the largest proportion of the tax gap (60%) noting that the share of the tax gap attributed to small businesses has increased over the last five years from 48% in 2019-20. They are followed by large businesses which makes up 12% of the gap then mid-sized businesses and criminals both at 9%.

Wealthy taxpayers and individuals make up a low proportion of the tax gap at 5% each. ...