HMRC has published its ‘Measuring Tax Gaps: 2019 edition’ report, which sets out details of the tax gap for 2017/18 - the difference between the amount of tax that should, in theory, be paid to HMRC, and what is actually paid.
The tax gap for 2017/18 is estimated at 5.6 percent, or £35 billion in cash terms. This represents a small increase from the 5.5 percent tax gap in 2016/17.
The tax gap for income tax, NICs and CGT is £12.9 billion and represents the biggest share of the total tax gap by type of tax with VAT next at £12.5 billion.
Small businesses represent 40 percent of the value of the gap in 2017/18 with large businesses next at 22 percent. Failure to take reasonable care comprises 18 percent of the gap with legal interpretation next.