UK tax gap one of the lowest in the world
Today’s figures reinforce the significant progress that HMRC has made in reducing the tax gap from 8.3% in 2005 to 2006.
If the tax gap had remained at the 2005 to 2006 level of 8.3%, it would have grown to £47 billion and the country would have been £11 billion a year poorer.
This year’s tax gap figures highlight the positive impact that HMRC’s digital transformation is having in making it easier for people to pay the right amount of tax.
In particular, the introduction of Real Time Information for the Pay As You Earn (PAYE) system has led to more accurate recording of information on payroll taxes, and the shift to VAT online has helped bring the VAT gap in 2014-15 to its lowest level of 10.3% (£12.7 billion).
The benefits to individuals and businesses will continue to grow as HMRC makes further progress on its digital transformation.
HMRC has one of the most robust and transparent tax gap estimates in the world, with its methodology scrutinised by the International Monetary Fund and the National Audit Office. No other country publishes such a level of detail on an annual basis. ■