Taxation
The question
To ask the Chancellor of the Exchequer, what the tax gap was in the (a) 2005-06 financial year and (b) latest financial year for which data is available; what steps her Department is taking to close the tax gap; and whether she has set a target for closing the tax gap.
Answered by James Murray
The tax gap is the difference between the amount of tax that should, in theory, be paid to HMRC, and the amount that is actually paid. In 2005-06 the tax gap was estimated to be 7.4% (£32.4bn). The latest estimates, published in June 2024, show the tax gap at 4.8% (£39.8bn) in 2022-23.
The government is committed to tackling the tax gap, through increasing HMRC's compliance staff, investing in HMRC’s technology infrastructure, and making policy changes to tackle tax non-compliance. The government will set out further details at the budget.
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