Shrinking the VAT gap is futile without digital change

As tax complexities increase, current processes need overhauling to reduce the error level and close the tax gap, warns Peter Boerhof, VAT director, Vertex

The tax gap in the UK – the difference between tax collected and the tax that should have been collected – has remained fairly consistent over the past 30 years. Governments have so far failed to significantly reduce the gap, due to a combination of a highly complex tax landscape, and the manually-intensive systems and processes many organisations use for indirect tax determination and reporting.

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