Latest tax gap figures estimated at 5.3%

Figures show that the estimated tax gap for 2023/2024 is 5.3%, equating to £46.8 billion in uncollected tax.

The government has announced plans to raise a further £7.5 billion through its measures to close the tax gap.

This includes the Making Tax Digital (MTD) programme, which aims to reduce tax gaps caused by errors and failures to take reasonable care. MTD for Income Tax will be introduced from April 2026 and is expected to generate £1.95 billion in additional tax revenue by the end of the 2029 to 2030 tax year.

Each year, HMRC estimates the tax gap using the most up-to-date information available, though figures may be revised as more data becomes available.

Findings from this year’s calculations show that small businesses represent the largest proportion of the tax gap (60%), followed by Corporation Tax (40%), failure to take reasonable care (31%), error (15%) and evasion (14%).

Exchequer Secretary to the Treasury, James Murray MP, said, “Every pound of tax uncollected puts a greater burden on honest taxpayers and deprives our public services of vital funding.

“In our first year in office, we have set out plans to raise an extra £7.5 billion through the most ambitious ever package to close the tax gap. We are determined to go further and faster to make sure everyone pays their fair share, and help to deliver our Government’s Plan for Change.”

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