When HMRC published its 2016 publication Measuring Tax Gaps, it gave an estimated total tax gap for 2014-15 of £36bn, or 6.5% of total tax revenues, a small reduction from the revised figure of £37bn for the previous year.

Many people are sceptical about the basis for the tax gap, and it is worth noting that HMRC itself acknowledges some concerns. As they say in the introduction, ‘these are our best estimates based on the information available, but there are many sources of uncertainty and potential error’. It is, of course, impossible to calculate the tax gap precisely.

Not only will there always be some ‘unknown unknowns’, to use Donald Rumsfeld's famous phrase, but any calculation must rely on estimates and the use of sampling techniques. The figures for each year are revised as more information becomes available, so the historical trends are updated in each year's publication. To HMRC's credit, the methodology is transparent and is reviewed by the Office for National Statistics. 

H