The ‘tax gap’ is shrinking, according to an Office for National statistics report published today, entitled ‘Measuring tax gaps’.
The ‘tax gap’ is the difference between the amount of tax that should, in theory, be paid to HMRC, and what is actually paid.
It amounted to £35bn, or 5.3% in the 2019/20 tax year. In the 2005/06 tax year, the tax gap was estimated to be 7.5%.
Commenting on the findings, Adam Walkom, Co-founder at London-based Permanent Wealth Partners, says:
“These figures show HMRC is heading in the right direction. After all, we all have a legal duty to pay tax.
“If you don’t pay the tax you owe, you should go to jail. It’s that simple.
“But remember, we also have the opportunity to structure our financial affairs, in 100% legal ways, which minimises the legal amount of tax we have to pay.
“I am constantly amazed at the number of people who don’t do this. If Governments want us to pay more tax, they should change the law, not try to persuade us with a moral obligation.”