CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. UK Tax Gap Narrows

UK Tax Gap Narrows

by Robert Lee,, London

23 October 2015

The Financial Secretary to the UK Treasury, David Gauke, has welcomed news that the UK tax gap fell to 6.4 percent in 2013-14 and stressed that the Government is "determined to continue fighting evasion and avoidance wherever it occurs."

The tax gap is the difference between the amount of tax due and the amount collected. It stood at 8.4 percent in 2005-06.

According to the Government, the reduction in the tax gap since 2005-06 represents an additional GBP57bn (USD87.8bn) in cumulative tax collected. The largest reduction has been in the corporation tax gap, which fell from 14 percent of relevant tax liabilities in 2005-06 to seven percent in 2013-14.

The Government invested nearly GBP1bn over the last Spending Review to transform HM Revenue and Customs's (HMRC's) approach to compliance and close the tax gap. In July, Chancellor George Osborne announced GBP800m in investment in HMRC over the next five years with the aim of strengthening the Department's ability to tackle evasion, reduce avoidance, and improve voluntary compliance. In 2014-15, HMRC brought in a record GBP517.7bn in tax revenue and secured GBP26.6bn in compliance yield.

Gauke said: "The UK has one of the lowest tax gaps in the world, and this Government is determined to continue fighting evasion and avoidance wherever it occurs. If the tax gap percentage had stayed at its 2009-10 value of 7.3 percent, GBP14.5bn less tax would have been collected."

"There is understandable anger when individuals or companies are perceived not to be contributing their fair share, but we can reassure the public that the proportion going unpaid is low and this Government is dedicated to bringing it down further."

Edward Troup, HMRC's Second Permanent Secretary and Tax Assurance Commissioner, added: "The long-term downward trend shows that our approach to non-compliance is delivering solid and sustained progress. We are committed to reducing the tax gap further and bringing in more money to fund vital public services. We are continuously looking for new ways to improve compliance and tackle non-compliance, whether by helping individuals do the right thing or by cracking down on offshore tax evasion by the wealthy or tax avoidance by multinationals."

TAGS: individuals | compliance | tax | investment | business | tax avoidance | corporation tax | United Kingdom | tax authority | offshore | multinationals | HM Revenue and Customs (HMRC) | HM Revenue and Customs (HMRC)

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »