Tax gap for 2019-20 increases slightly from 2018-19

The UK tax gap for 2019-20 was estimated to be £35bn which is 5.3% of theoretical tax liabilities according to HMRC's latest analysis. This is a small increase from 2018-19 when the percentage was 4.7%. However HMRC states the gap has been reducing over the past 15 years from 7.5% in 2005-06.

As in past years HMRC attributes most of the gap to small businesses (£15.1bn or 43%) with large businesses responsible for 17% (£6.1bn). Criminals are the third largest component making up 15% (£5.2bn) of the gap followed by mid-sized businesses at 14% (£5bn).

Wealthy taxpayers – defined as individuals with an income of more than £200 000 or assets of more than £2m – account for the smallest share at £1.5bn (4%) and individuals £2.6bn (7%).

The gap comprises the following behavioural components: 

Behaviour                 ...