Uncollected Taxes Gap Cut Again

Uncollected Taxes Gap Cut Again.

In its latest round of tax revenue reports, HMRC has confirmed that the amount of taxes due that are actually being collected has increased yet again.

The total taxes due in the UK in 2013/14 was around £531 billion and the amount actually collected and paid was £497 billion, meaning that just £34 billion remains uncollected.

This is a tax gap of just 6.4% uncollected. A remarkable turnaround since the Conservative/Liberal Democrat coalition came into power 2009/10 and continued today by the Conservatives.

Looking historically, the tax gap in 2005/06 was 8.4% and 7.3% 2009/10. Had the 8.4% gap been maintained and no improvements made, then uncollected taxes would be £44 billion i.e. £10.4 billion higher than they are. This is a huge revenue improvement for the country but it puts in perspective how much money governments actually have to play with.

Why is the gap lower i.e. the tax take higher?

HMRC has additional powers now for anti-avoidance and investigations. In addition, lower company liquidation numbers and lower personal bankruptcies as well as higher employment mean more people are able to pay their taxes.