The tax gap \u2013 the difference between the amount of tax that should be paid and what is actually paid – has shrunk to just 5.6 per cent.<\/p>\n
The finding forms part of a new report published by HM Revenue & Customs (HMRC) into the effectiveness of its tax collection and anti-avoidance measures.<\/p>\n
According to the data, the latest tax gap estimates show that 94.4 per cent of all tax due was paid in 2017\/18, meaning an estimated 9.9 billion in tax went missing.<\/p>\n
This is compared to 2005\/6 \u2013 the last time figures were recorded \u2013 when just 92.8 per cent of tax was actually collected.<\/p>\n
When broken down by sector, the figures show that the duty-only excise tax gap has reduced from 8.4 per cent in 2005\/6 to 5.1 per cent in 2017\/18, while the Corporation Tax gap has reduced from 12.5 per cent in 2005\/6 to 8.1 per cent in 2017\/18.<\/p>\n
HMRC says the large majority of the business tax gap can be attributed to VAT, in which an estimated \u00a33 billion went missing in 2018\/19.<\/p>\n
It is believed that Making Tax Digital (MTD), the new digital accounting scheme which launched in April this year, was introduced to help close that gap. Under the new regime, almost every VAT-registered business is required to record and file their VAT returns digitally, using only MTD-compliant software.<\/p>\n
Commenting on the report, Jesse Norman MP, Financial Secretary to the Treasury, said HMRC\u2019s anti-avoidance measures have helped collect more than \u00a3200 billion in extra tax since 2010.<\/p>\n
\u201cThe UK\u2019s low tax gap underlines both how the vast majority of people are paying the correct amount of tax, and how effective HM Revenue and Customs has been in its efforts to clamp down on tax evasion and avoidance,\u201d she said.<\/p>\n","protected":false},"excerpt":{"rendered":"
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