HMRC Publishes Tax Gap Figures

HMRC has published information stating that in 2012-13, the tax gap, which is the difference between the amount of tax due and the amount collected, was 6.8% of tax liabilities amounting to £34 billion.

The tax gap, which is calculated using a range of internal and external data, includes tax owed by companies that have become insolvent, tax avoidance and evasion, criminal attacks and low level errors made in tax returns.

Although this is a jump from last year, the long-term trend is that this percentage is falling from a record 8.5% in 2005-2006, this appears to show that HMRC has been successful in clamping down on tax avoidance schemes.

Previous years:-

• 2012-2013 6.8%, or £34 billion
• 2011-2012 6.6%, or £33 billion*
• 2010-2011 6.8% or £33 billion

HMRC has been under increasing pressure from the UK government to raise funds from taxation and has stated that it will continue to deploy its resources and skills to maintain the downward pressure that has proven to be effective in reducing the tax gap in recent years.

Financial secretary to the Treasury David Gauke said: “Since 2010-11 the percentage tax gap has stayed lower than at any point under the previous government, saving the country £4 billion. Today’s figures show that there’s still more work to do but our continued drive to tackle avoidance means that avoidance is down.”

If you suspect that you may fall under investigation by HMRC for alleged tax avoidance or evasion, it is essential that you seek expert advice from a tax investigations professional in order to clarify your tax position and ensure that you are complying with HMRC’s requirements.

For more information and to speak to a tax investigations professional in complete confidence call 0113 387 5670 or fill out an Enquiry Form .

* Estimate for 2011-12 was reduced from £35bn to £33bn, reflecting “continued improvements in reporting and updated data”.