- The tax gap is the difference between the theoretical tax liability and the tax actually paid
- The tax gap for 2022-2023 is estimated to be 4.8% of total theoretical tax liabilities, or £39.8 billion
- The VAT gap has decreased from 13.7% in 2005 to 4.9% in 2022-2023
- The Corporation Tax gap has increased from 11.4% in 2005 to 13.9% in 2022-2023
- The tax gap from small businesses is the largest component at 60% share in 2022-2023
- The VAT gap represents 20% of the overall tax gap
- Different approaches are used to measure tax gaps, with VAT and excise duties mainly estimated using a ‘top-down’ approach
Source: marcusward.co
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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