£35bn! Amount UK lost in tax last year
THE amount of tax lost due to non-payment, avoidance and fraud has increased to £35billion, HM Revenue and Customs (HMRC) figures show.
The tax gap – the difference between the tax expected and what is actually paid – was estimated to have risen by around £2billion in 2019/20 financial year.
This represents 5.3 per cent of the tax due – up from 5 per cent, or £33billion, the previous financial year.
The latest figures mean that nearly 95 per cent of the tax due was paid in 2019/20.
Failure to ‘take reasonable care’ accounts for a significant chunk of the tax gap at £6.7billion, according to the figures, while avoidance accounted for £1.5billion. Some £3.7billion of the gap is estimated to be due to error and £3billion due to the ‘hidden economy’ – whole sources of income that have not been declared.
But HMRC said any impact from the lockdowns and economic downturn will not be seen until the 2020/21 figures, which will be released next year.