Tax gap for 2020/21 confirmed as 5.1%

23 June 2022

In a press release, Her Majesty’s Revenue and Customs (HMRC) has confirmed the estimated tax gap for tax year 2020/21 is 5.1%. This means it hasn’t changed from the previous tax year.

The tax gap refers to the difference between the amount of tax that should have been paid to HMRC, compared to what’s actually been paid.

Although the percentage tax gap remains unchanged from last year, the actual monetary value has changed, from £34 billion in 2019/20, to £32 billion in 2020/21, marking a fall of £2 billion. Tax due fell from £672 billion in 2019/20 to £635 billion in 2020/21 because of the economic effects of Covid-19.

HMRC estimates the tax gap for both direct and indirect taxes on an annual basis. It uses the latest information available but may amend tax gaps from previous years as more data becomes available.

More detailed analysis of the tax gap can be located here.

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