Closing the tax gap.... could it be good for your health?
The latest tax gap stats have been released by HMRC. The difference between what was collected and what should have been paid is £33 billion or 5.7 per cent.
According to the government, if the gap had stayed at 2006 levels, "the UK would have lost £71 billion in revenue destined for public services".
"Keeping the tax gap consistently low is a result of HMRC’s work to help customers get things right from the start, and the department’s sustained efforts to tackle evasion and avoidance."
All the info is online in Measuring Tax Gaps but findings include:
- Small businesses made up the largest proportion of unpaid tax by customer group at £13.7 billion;
- Taxpayer errors made up £9.2 billion of unpaid taxes by behaviour;
- Criminal attacks accounted for £5.4 billion;
- Income tax, national insurance contributions, and capital gains tax made up the largest proportion of the tax gap by tax type at £7.9 billion for 2016-17, equivalent to 16.4% of self assessment liabilities;
- The VAT gap showed fell from 12.5 per cent in 2005 to 2006 to 8.9 per cent in 2016-17.
Lowest for five years
Jon Thompson, HMRC’s chief, says: "The UK is the only country in the world to regularly publish their tax gap in detail and at 5.7 per cent, it remains at its lowest for five years. I am pleased that the downward trend shows HMRC and HM Treasury’s continued hard work to tackle evasion and avoidance is working.
"HMRC is also working hard to help taxpayers get their tax right by offering support and investing in digital services to improve businesses’ record keeping and reduce errors."
Making Tax Digital for businesses is there to reduce the tax gap by helping to prevent error and failure to take reasonable care. Digital record keeping combined with a modern, more automated tax system will help businesses get their affairs right the first time. That's all according to HMRC.
Positive figures .... right tax at the right time
Mel Stride, Treasury financial secretary, says: "These really positive figures show that the tax gap is the lowest in the last five years, which reflects the hard work that HMRC and I have been doing to ensure we support businesses to pay the right tax at the right time and clamp down on tax evasion and avoidance.
"Collecting taxes is essential for funding our vital public services such as the NHS. Indeed, had the tax gap remained at its 2005-06 level the UK would have lost £71 billion in revenue destined for public services. Enough to build 200 hospitals."
And on the NHS, Theresa May, prime minister, has announced a £20 billion funding boost for the health service. Apparently, the "Brexit dividend" will help towards the investment. The rest will be borne by the taxpayer. Taxes will rise "a bit" but in a "fair and balanced" way.
Where's that tax gap cash when you need it?
