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£40 billion lost to the Tax Gap

The official gap between the amount of tax owed and what the government collects, has grown to nearly £40 billion, new HMRC figures show.

The official figures released by HMRC were also expected to provide an estimate of the annual offshore tax gap for individuals in Self Assessment. Chief Secretary to the Treasury, Nigel Huddlestone had provided a written answer to Margaret Hodge on this issue confirming the data would be released alongside the Tax Gap statistics on the 20th June 2024. This followed a previous delay whereby the offshore data was expected to be published in 2023. However no offshore tax gap data has been released today.

Instead the 2024 Tax Gap release states: “This publication includes updates to established tax gap estimates only. The ‘Measuring tax gaps 2023 edition’ referenced a future development priority to quantify non-compliance associated with UK residents’ failure to declare offshore income. HMRC plan to publish this analysis after the election period.”

This comes as an investigation by The Bureau of Investigative Journalism found that HMRC hasn’t fined a single enabler of offshore tax evasion in five years, despite landmark powers introduced in 2017.

Rachael Henry, Head of Advocacy and Policy at Tax Justice UK, said: “Giving HMRC the tools it needs to collect unpaid tax is essential. Whether it’s the direct return on investment to the tax authority or being able to spend extra tax revenue on getting the UK healthy again. It is an open goal for the government and a winner for the country.

Simply put, it is not just or right for billions of pounds of tax to be left uncollected. The NHS desperately needs extra funds and people are having to put unaffordable basics back on supermarket shelves far too often. The tax gap of £40bn is vital revenue to help clear waiting lists and guarantee people get the healthcare appointments and treatments they need.”

If the Tax Gap were to be closed by just 10%, this could cover the cost of ending the two child benefit cap. Closing the Tax Gap by 20% could pay for around 60,000 nurses, 40,000 teachers, and 40,000 police officers. This illustrates how the collection of unpaid tax could be transformative for public services and the social security net in the UK.

[ENDS] Notes to editors:

  • For more information contact: Jake Woodier, Deputy Director – Comms, Tax Justice UK on: 07503 789 994 /
  • The HMRC Tax Gap figures arehere.
  • The “Tax Gap” is the difference between the amount of tax that should be collected and the amount actually collected, and grew from nearly £36 billion in 2021/22 to £40bn in 2022/23.
  • Tax Justice UK is a campaigning and advocacy organisation. Our mission is to ensure that everyone in the UK benefits from a fair and effective tax system. We are not-for-profit and politically non-aligned. Tax Justice UK is a partner of (but independent from) the Tax Justice Network.