HMRC has published its estimate of the UK’s tax gap for the 2016/17 tax year, finding that the gap, which is the difference between the amount of tax that HMRC calculates should have been paid and the actual amount received, has fallen to 5.7 per cent (£33 bn). This level is part of a long-term decline in the tax gap, suggesting that HMRC’s efforts to tackle tax avoidance and evasion are proving successful.

Key findings from the report include:

• small businesses made up the largest proportion of unpaid tax by customer group at £13.7 bn
• taxpayer errors and failure to take reasonable care made up £9.2 bn of unpaid taxes by behaviour, while criminal attacks made up £5.4 bn
• income Tax, National Insurance Contributions, and Capital Gains Tax made up the largest proportion of the tax gap by tax type at £7.9 bn
• the VAT gap also continued a declining trend, falling from 12.5 per cent in 2005/06 to 8.9 per cent in 2016/17.