Ecospend, the leading payments platform in the UK, recently acquired by Trustly, outlines the potential of Open Banking payments to close the VAT tax gap which stands at £10 billion, or 6.9% of the VAT receipts received by the government, for the financial year 2021-22.
Estimates from HMRC have found that Open Banking has been pivotal in closing the VAT gap, which is the difference between the expected VAT revenue and the actual amount collected, for the tax year 2021 to 2022. Falling from 7% the previous year, this signals the existing role that new payment technologies have played in reducing the gap and the crucial function they will have in ensuring that the tax gap continues its current trajectory.
Source: financialit.net
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