- The estimated tax gap for the 2022 to 2023 tax year is 4.8% of total theoretical tax liabilities, amounting to £39.8 billion.
- This represents a reduction from previous years, with the tax gap decreasing from 7.4% in 2005-2006 to 4.8% in 2022-2023.
- The tax gap for VAT decreased from 13.7% to 4.9%, while the gap for Income Tax, National Insurance contributions, and Capital Gains Tax reduced from 4.5% to 3.0%.
- However, the Corporation Tax gap increased from 11.4% to 13.9%, and the excise duties gap decreased from 8.3% to 4.7%.
- The largest components of the tax gap are the Corporation Tax gap and the Income Tax, NICs, and Capital Gains Tax gap, each accounting for 34% of the overall tax gap, followed by the VAT gap at 20%.
- The tax gap from small businesses constitutes the largest portion at 60%, while the gaps from wealthy individuals each make up only 5% of the total tax gap in 2022-2023.
- These estimates are subject to uncertainty and potential revision.
Source gov.uk
