1. What is the VAT Gap?
The VAT gap is measured by comparing the net VAT total theoretical liability (VTTL) with actual receipts (this is comparing the amount of VAT HMRC expects to receive in the UK and the VAT HMRC actually receives). The VAT gap methodology uses a ‘top-down’ approach.
2. Preliminary estimate of the VAT gap for 2019 to 2020
The table below gives the headline figures used to estimate the Preliminary 2019 to 2020 VAT gap estimate, along with the Preliminary 2019 to 2020 VAT gap estimate.
| Year | Net VAT Total Theoretical Liability | HMRC Net VAT receipts | Net VAT receipts (Adjusted) | VAT gap (point estimate) | VAT gap (per cent) |
|---|---|---|---|---|---|
| 2019-20 | £146.6bn | £130.4bn | £134.9bn | £11.7bn | 8.0 |
Source gov.uk
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