HMRC's tax gap estimates

October 22, 2015 10:08 AM

This morning, HMRC have published their estimates of the UK's tax gap, and it turns out to be rather short of the ludicrous £120 billion figure which is cited all too often.

The headline figure is that the tax gap is estimated to be £34 billion - 6.4% of total tax due. This is down on the 8.4% gap in 2005-06 and is part of a broad downward trend.

Some of our previous research is well worth a read on this - in 2011-12 the tax gap would have been more than enough for a 1p cut in the rate of income tax!

HMRC cite significant improvements in tackling non-compliance, but we at the TaxPayers' Alliance are in no doubt that the most effective method of reducing the tax gap would be lower, simpler taxes.

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