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HMRC estimates £35bn tax shortfall
by Brian Cantwell on Oct 11, 2013 at 12:29
HM Revenue & Customs (HMRC) has estimated the tax gap at £35 billion for 2011/12, or 7% of tax due.
That is up from £34 billion in 2010/11, which HMRC attributed to an increase in the VAT gap caused by its rise to 20%. It said that in percentage terms, the tax gap had fallen from its previous 7.1% figure.
The tax gap measures the difference between the amount of tax that HMRC is entitled to collect, and the amount that it collects in practice.
Exchequer secretary David Gauke (pictured) said: ‘These figures show the tax gap is continuing to fall. The vast majority of businesses and individuals pay the taxes they owe. But where they don’t it is for HMRC to challenge non-compliance fiercely, protecting money that would otherwise be lost.
‘Since 2010, the government has invested nearly £1 billion in additional compliance initiatives over the spending review period. HMRC is on track to secure a further £44 billion in tax revenues over the next two years.’
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