1. What is the VAT Gap?
The VAT gap is measured by comparing the net VAT total theoretical liability (VTTL) with actual net VAT receipts (this is comparing the amount of VAT HMRC expects to receive and the VAT HMRC actually receives). The VAT gap methodology uses a ‘top-down’ approach.
2. Second estimate of the VAT gap for tax year 2021 to 2022
The table below shows the headline figures used to produce the second VAT gap estimate for financial year 2021 to 2022.
| Financial year | Net VAT total theoretical liability | HMRC net VAT receipts | Net VAT receipts related to net VAT total theoretical liability in 2021 to 2022 | VAT gap (point estimate) | VAT gap (percentage) |
|---|---|---|---|---|---|
| 2021 to 2022 | £141.9 billion | £157.5 billion | £134.2 billion | £7.7 billion | 5.4 |
Source gov.uk
