Latest tax gap figures estimated at 6.4%

Figures show that the estimated tax gap for 2024/2025 is 6.4%, equating to £59.2 billion in uncollected tax.

Unpaid Tax

According to the latest data, HMRC collected £865.2 billion in 2024 to 2025, representing 93.6% of all tax due.

This means an estimated £59.2 billion was unpaid that tax year.

However, the tax gap has fallen from 7.5% since measurement began in 2005 to 2006.

Key Findings

Findings from this year’s calculations show:

• Small businesses continue to represent the largest customer group of the tax gap (62%).
• Corporation Tax accounts for 35% of the total tax gap.
• Around half of the SME tax gap is for Corporation Tax.
• The largest behavioural risks to the tax gap are failure to take reasonable care due to carelessness or negligence (35%), errors (16%) and evasion (12%).

Modern Tax System Should Help to Reduce Tax Gap

Commenting on the findings, JP Marks, HMRC Chief Executive and First Permanent Secretary, said, “Today’s estimates reflect the changing world in which HMRC operates, where it is becoming more difficult to tackle non-compliance through traditional approaches alone.

“That is why our aim is a well-designed modern tax system that makes it easier to get things right first time and harder to get things wrong, and which allows us to respond effectively to non-compliance and tackle criminal activity.

“Measuring the tax gap helps us track long-term trends, which influence our policies and compliance strategy, allowing us to focus our efforts in the right places. In 2024-25, we collected and protected a record £48 billion in compliance yield. This is money that would have gone unpaid without our intervention.”

For more information, please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.