UK VAT Gap Rises to £11.9bn in 2024–25, HMRC Reports 6.5% Shortfall

• The UK VAT gap for 2024–25 has increased to £11.9 billion (6.5%), up from £8.9 billion (5%) in 2023–24.
• HMRC’s revised estimate is £0.5 billion higher than its initial projection for the year.
• The VAT gap measures the difference between expected VAT revenue and actual receipts.
• Other European countries are adopting real-time digital reporting and e-invoicing to reduce VAT losses; the UK plans to mandate e-invoicing in 2029.
• The final VAT gap estimate for 2024–25 will be published in summer 2026.

Source: p2pnetwork.org

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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