TaxAdministrationTax gap widens to £42bn: HMRC

Tax gap widens to £42bn: HMRC

The shortfall between the tax that should be collected and what is actually paid is £42bn, HM Revenue & Customs estimates

HM Revenue & Customs has estimated £42bn of tax owed did not come into
the UK’s coffers in 2008-2009.

The “tax gap” is the shortfall between what HMRC believes should be paid and
the revenues eventually collected. It has increased from £38bn in 2007-2008.

£42bn is 9% of the total tax actually paid in 2008-2009, HMRC stressed.

However, the tax agency, which has come under fire recently after the PAYE
storm, may find itself in line for more criticism because of the shortfall.

“Estimating the scale of, and trends in, tax gaps is difficult and a
relatively untested area of work for governments in the EU and around the world,
” the taxman said in a report.

“HMRC has developed estimates for tax gaps for the main direct and indirect
taxes that it administers that it believes are the best possible, based on all
the information presently available.”

Further reading:

Tax
gap data forced out of HMRC

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