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The tax gap between revenue the UK was supposed to raise and the amount annually raised has hit £39.8bn in the 2022-23 financial year.
According to new figures released by HMRC, this gap represents 4.8% of the amount of tax due, down from 5.2% in the previous financial year.
The data shows that the largest components of the tax gap by tax type are the corporation tax gap and the income tax, NICs and capital gains tax gap.
The tax gap relating to corporation tax has increased from 17% of the overall tax gap in 2018 to 2019 to 34% in 2022 to 2023, while the share of the tax gap from VAT has fallen from 28% of the overall tax gap in 2018 to 2019 to 20% in 2022 to 2023.
The income tax, NICs and capital gains tax gap share decreased from 39% to 34% over the last 5 years.
HMRC has also revealed that the tax gap attributed to small businesses has increased over the last 5 years, from 44% of the overall tax gap in 2018 to 2019 to 60% in 2022 to 2023.
However, the tax gap attributed to large businesses has fallen from 15% of the overall tax gap in 2018 to 2019 to 11% in 2022 to 2023.
