For 2022/23, the tax gap has increased to a record £39.8 billion, with small businesses being blamed for around 60% of uncollected taxes.
The tax gap is the difference between the amount of tax that should, in theory, be paid to HMRC and what is actually paid. Despite the record high receipts in monetary terms, the overall tax gap has fallen in percentage terms. It is now estimated that 4.8% of taxes are unpaid compared with 7.4% back in 2005/06. Small companies The worst offenders are small limited companies, with the amount of unpaid corporation tax now standing at £10.9 billion, nearly triple the £3.7 billion of five years ago. This means:
By comparison, the tax gap for mid-sized companies is 6.7%, and for large companies is 2.9%. High tax take The recently released figures also give a stark illustration of how much the tax take has increased:
Tax receipts as a proportion of GDP over the past 20 years have previously been steady at around 28% but now stand at just over 30%. Behaviour The two types of behaviour contributing most to the tax gap are:
If you need help with your tax liabilities, please get in touch. Comments are closed.
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