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Tax gap - HMRC has issued its estimate of the tax gap

Date: 13th November, 2012   |   Author: Cathy Corns   |   Comments: 0

HMRC has issued its estimate of the tax gap – the difference between its estimate of what tax is due and what is actually collected.  For 2010/11 it estimates the gap at £32 billion which is broken down over taxes and behaviour.  HMRC believes that personal taxes and VAT account for almost £24 billion of the shortfall.

The behavioural breakdown is interesting though – HMRC’s estimates are:

  £ billion
 
Illegal  
  - Criminal attacks 5
  - Evasion 4
  - Hidden economy 5
  - Non-payment 4
 

18

and...

Other  
   - Avoidance  5
   - Legal interpretation  4
   - Errors and mistakes  5
 
   14

Looking at the numbers and the press coverage, one would have expected the avoidance estimate to be higher.  Maybe next year...

 

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