Update October 30, 2024: Published preliminary estimate of the VAT gap for the tax year 2023 to 2024.
- Definition of VAT Gap: The VAT gap represents the difference between the net VAT total theoretical liability (VTTL) that HMRC expects to collect and the actual VAT receipts. It is expressed as both a point estimate and a percentage of the VTTL, using a top-down methodology.
- Preliminary Estimate for 2023-2024: For the tax year 2023-2024, the VAT gap is estimated at £9.5 billion (5.3% of VTTL), reflecting an increase from 4.9% (£8.1 billion) in 2022-2023, but a decrease from 5.9% (£8.4 billion) in 2021-2022. Adjustments are made to account for VAT payments affecting receipts across different years.
- Publication Timeline: HMRC publishes three estimates of the VAT gap annually: a preliminary estimate in autumn, a second estimate in spring, and a final estimate in the summer as part of the ‘Measuring tax gaps’ series. The preliminary estimate for 2023-2024 was published during the Autumn Statement 2024.
- Revisions and Methodology: HMRC revises historical VAT gap data annually in the ‘Measuring tax gaps’ publication, incorporating new data and methodological improvements. The methodology for estimating the VAT gap is detailed in the ‘Measuring tax gaps 2024 edition – Methodological annex’.
- User Engagement Commitment: HMRC emphasizes the importance of user engagement to improve the quality and relevance of its statistical outputs, encouraging feedback to identify and address gaps in their statistics.
Source gov.uk
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