The latest Tax Gap publications for 2022/23 were published last month by HMRC and set out how the tax gap has increased by £1.7 billion to £39.8 billion in absolute terms. In percentage terms the tax gap is 4.8 percent (5.2 percent 2021/22) of the £823.8 billion total theoretical tax liabilities for 2022/23. The tax gap is the difference between what HMRC expects the total tax take for 2022/23 to be, and the actual tax received. According to the statistics in the publications which are linked below, small businesses accounted for nearly two thirds of unpaid tax.
The largest components of the tax gap by tax type are the Corporation Tax gap and the Income Tax, National Insurance Contributions and Capital Gains Tax gap, both at a 34 percent share, followed by the VAT gap with a 20 percent share. As in previous years, the tax gap from small businesses is the largest component of the tax gap by taxpayer group which was a 60 percent share in 2022/23.
There was also strong year-on-year growth in HMRC’s tax receipts in these two years, most likely due to fiscal drag. You can read the published receipts figures on GOV.UK.
The 2022/23 Tax Gap publications are as follows:
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