The tax gap for VAT (VAT gap) is estimated to be £9.0 billion in tax year 2020 to 2021. This equates to 7.0% of net VAT total theoretical liability.
The VAT gap shows a downward trend between tax years 2005 to 2006 and 2020 to 2021, falling from 14.1% to 7.0%.
The VAT gap estimate for the 2020 to 2021 tax year has been revised slightly upwards from the second estimate of £8.6 billion (equating to 6.7% of net VAT theoretical liability), published alongside ‘Spring Statement 2022’ in March 2022, due to the inclusion of new expenditure data.
Source gov.uk
