New data from HMRC shows that the UK missed out on £46.8bn of tax liabilities in the 2023-2024 financial year, or 5.3 per cent of the total theoretical tax liabilities.
The taxman said small businesses are the largest component of the tax gap by customer group at a 60 per cent share in 2023 to 2024 up from 48 per cent of the overall tax gap in 2019 to 2020.
The tax gap due to individuals and wealthy individuals has changed little since 2019 to 2020 and accounts for 10 per cent of the overall gap in 2023 to 2024, HMRC said.
Rachael Griffin, tax expert at Quilter, said the rise in corporation tax going uncollected was a “red flag” amid concerns over economic uncertainty and global tax competition.
HMRC said the combined share of the tax gap attributed to individuals and the wealthiest now accounts for just 10 per cent of the overall amount.
Despite this a special investigations team doubled its tax haul from wealthy people in 2023-24, compared with the previous year, in a crackdown on the wealthy. A department at HMRC set up to target wealthy taxpayers netted more than £1.5bn in 2023-24.
“But it’s also important to know what’s not in those figures. Recent reporting by the National Audit Office suggests that there may be serious under-estimation of tax going unpaid by wealthy individuals, through offshore tax evasion, and in areas like online retail.
“For spending on large companies’ tax compliance, that figure rose to £46.33. Chasing just one single wealthy taxpayer’s unpaid taxes brought in £2.5bn of extra revenue between 2022-24. That’s larger than the overspend by all NHS provider trusts in those years.”
Critics have questioned whether the taxman will be able to close the gap given the squeeze on its budgets. Mike Lewis said: “To tackle the tax gap, the Chancellor has promised 5,500 new HMRC compliance staff and 2,400 new debt management staff by 2029. In real terms, however, HMRC’s day-to-day spending will only increase by 0.7 per cent annually to 2028/9. This is below this year’s civil service pay deal, suggesting headcount cuts are still possible elsewhere.”
Tax investigators say HMRC has been thwarted in its efforts to act against tax advisers who enable their clients to avoid and evade tax. They say a welter of legal and procedural obstacles hinder their efforts.
James Murray, a Treasury Minister and chair of the tax collection agency’s board, said: “Every pound of tax uncollected puts a greater burden on honest taxpayers and deprives our public services of vital funding.
“In our first year in office, we have set out plans to raise an extra £7.5bn through the most ambitious ever package to close the tax gap. We are determined to go further and faster to make sure everyone pays their fair share.”
Read More Details
Finally We wish PressBee provided you with enough information of ( Rich and tax evaders are keeping £46bn a year due to HMRC failures )
Also on site :