THE UK TAX GAP fell in 2014/15 to its lowest-ever level of 6.5%, official statistics have revealed.
HMRC has reduced the gap, which was 8.3% in the year 2005 to 2006 – if it had stayed at that rate the country would have been £11bn per annum poorer. The figures show record revenues of £518bn being collected from 2014 to 2015. HMRC has brought in more than £2.5bn from offshore tax evaders since 2010.
Jon Thompson, chief executive of HMRC, said the tax collector had “successfully maintained a downward pressure” on the tax gap. “The vast majority pay what they owe, when they owe it. We should be proud that we meet our obligation as a nation in paying for our public services.”
George Bull, RSM, said HMRC had maintained the gap rather than letting it slip, but flagged up it’s new focus on battling tax evasion and tax crime, which he described as an “unprecedented attack”.
Jane Ellison, financial secretary to the Treasury, said: “This government is committed to tackling tax evasion and avoidance. By investing £1.8bn since 2010 in boosting HMRC compliance capabilities, the tax gap is down to its lowest ever level, and we’ve invested £1.3bn in new digital tools.”
The introduction of Real Time Information for the PAYE system has led to more accurate recordings of taxes. Additionally, the shift to online VAT filing has been claimed to have brought the VAT gap in 2014/15 to its lowest level, of £12.7bn. HMRC highlighted the positive impact of digital transformation has made in helping the right amount of tax to be paid.
Thompson, concluded: “If we are to ensure a fairer and more effective tax system, and more money for public services, we must keep up the pressure on the tax gap by relentlessly pursuing the small minority who seek to cheat their taxes through evasion, aggressive avoidance and organised crime.”
An examination by the Public Accounts Committee (PAC) has revealed serious concerns relating to HMRC’s plans
Andrew Tyrie suggests there will not be enough time to implement Making Tax Digital (MTD) by April 2018
The ACCA has announced a partnership with UK research and development tax reclaim specialist RD Tax Solutions
The tax HMRC expects is underpaid by large companies through “transfer pricing” has risen by 60%