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3mo ago

Government to Invest in HMRC Enforcement to Close £46.8 billion Tax Gap

Chancellor Rachel Reeves has earmarked £1.7 billion to recruit thousands of new staff with compliance roles under digital reporting reforms

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HMRC has vowed to cut the tax gap to pay for more public services but the latest figures show the gap is growing (Photo: claudio divizia//iStockphoto)
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Overview

  • Unpaid taxes reached £46.8 billion in 2023–24, representing 5.3% of all theoretical tax liabilities.
  • Small businesses accounted for 60% of the gap, up from 48% five years earlier.
  • The corporation tax gap rose to 15.8% in the year to April 2024, its highest level in over a decade.
  • The government aims to recover an additional £7.5 billion through its most ambitious enforcement package to date.
  • HMRC’s Making Tax Digital programme for VAT is forecast to generate more than £4 billion by 2030 by reducing filing errors.