The UK government recently released its estimate that the tax gap for 2019/20 is £35bn, which amounts to 5.3% of the total tax liabilities which fell due that tax year. The government defines the tax gap as ‘the difference between the amount of tax that should, in theory, be paid to HMRC, and what is actually paid’.

International issue

The fact that HMRC is estimated to have collected 94.7% of all taxes due seems like a positive achievement, when compared with many developing countries, which often have far higher tax gaps. For example, it has been estimated that in India as little as one third of all taxes due are actually paid.