The ‘tax gap’ increased to £42 billion in 2008/09, according to HMRC’s latest estimate.
The ‘tax gap’ increased to £42 billion in 2008/09, according to HMRC’s latest estimate. In ‘Measuring Tax Gaps 2010’ the department reported that the total tax gap, defined as the difference between tax collected and ‘the theoretical liability’, comprised £22.5 billion of direct taxes and £19 billion of indirect taxes. The figures include the estimated impact of avoidance schemes.
‘The theoretical tax liability represents the tax that would be paid if all individuals and companies complied with both the letter of the law and HMRC’s interpretation of the intention of Parliament in setting law (referred to as the spirit of the law),’ HMRC said.
A ‘time series’ of the tax gap from 2004/05 to 2008/09 showed that, over the period, the gap ‘has remained fairly stable, at around £40 billion, with a small increase between 2007/08 and 2008/09 from £38 billion to £42 billion’.
David Gauke, Exchequer Secretary to the Treasury, said: ‘The tax gap number is staggering and this Government is committed to taking the necessary action to bring it down – taking steps to reduce tax avoidance and evasion, including by the richest people in our society, so that everyone pays their fair share and we reduce the tax gap over the coming years.’
The ‘tax gap’ increased to £42 billion in 2008/09, according to HMRC’s latest estimate.
The ‘tax gap’ increased to £42 billion in 2008/09, according to HMRC’s latest estimate. In ‘Measuring Tax Gaps 2010’ the department reported that the total tax gap, defined as the difference between tax collected and ‘the theoretical liability’, comprised £22.5 billion of direct taxes and £19 billion of indirect taxes. The figures include the estimated impact of avoidance schemes.
‘The theoretical tax liability represents the tax that would be paid if all individuals and companies complied with both the letter of the law and HMRC’s interpretation of the intention of Parliament in setting law (referred to as the spirit of the law),’ HMRC said.
A ‘time series’ of the tax gap from 2004/05 to 2008/09 showed that, over the period, the gap ‘has remained fairly stable, at around £40 billion, with a small increase between 2007/08 and 2008/09 from £38 billion to £42 billion’.
David Gauke, Exchequer Secretary to the Treasury, said: ‘The tax gap number is staggering and this Government is committed to taking the necessary action to bring it down – taking steps to reduce tax avoidance and evasion, including by the richest people in our society, so that everyone pays their fair share and we reduce the tax gap over the coming years.’
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