HMRC have published figures that detail the UK tax gap. This shows the UK tax that accounts for the largest share of the gap and indicates it is small employers that are the largest contributor to the gap.
The tax gap is the difference between:
- HMRC’s estimate of the total UK tax due; less
- The total UK tax that HMRC have collected
If HMRC have failed to collect 100% of the tax due, the percentage difference reflects the tax gap.
On 23 June 2026, HMRC published its official statistics that show the predicted tax gap for tax year 2024/25 is 6.4%:
- HMRC estimate that total UK tax due was £924.4 billion (100%); but
- HMRC collected £865.2 billion (93.6%)
Closing the tax gap has been a priority for successive UK Governments and Figure 1.1 shows the tax gap fluctuating between 7.5% and 5.2% for tax years from 2005/06 to 2024/25. Statistics are useful; however, the headline facts and figures are the most important. These show:
- The largest share of the tax gap estimate is from small businesses’ non-compliance (62%);
- Corporation Tax accounts for 35% of the tax gap and, again, small businesses are the largest contributors to this (around 50%);
- Income Tax, National Insurance Contributions and Capital Gains Tax also account for 35% of the tax gap with Self-Assessment being a large contributor
To close the tax gap, HMRC have been allocated additional monies to fund an additional 5,500 compliance and 2,400 debt management staff.
For Bookkeepers
The largest contributor to the tax gap is the failure to take reasonable care in compliance with tax obligations. This is followed by error with deliberate evasion being a lower contributor.
ICB is playing its part in closing the tax gap by providing a range of resources that aid compliance and ensure you are able to operate with care.