Tax gap increases by £1bn, says HMRC

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HMRC estimated this week that the tax gap for 2010/2011 has dropped to £32bn, or 7.1% in the previous year to 6.7%. 

Overall, however, there has been an increase in the tax gap of £1bn, due to the increase in the VAT gap that reflected the increase in the tax rate. 

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By Locutus
20th Oct 2012 13:20

Margin of error
People and businesses obviously don't submit returns showing the tax they evade or avoid. The goalposts for what is the 'right' and 'wrong' type of avoidance is also unclear, as that rather depends upon the morality of each person.

As such the margin of error for the tax gap is so large that trying to quantify the annual change is pretty much meaningless.

The only effective way of narrowing the tax gap is to simplify the tax system and to tax things that are difficult to hide or dispute the value of.

Thanks (2)
22nd Oct 2012 12:35

margin of error

avoidance is only costing 0.4bn? to HMRc that must be a joke, since our chancellor is hammering down on benefit claimants (left right and centre and building a huge"work and pensions Theocracy" to preach to anyone who has to claim and take it all away in the unversal tax credit and (another HUGE OVER FUNDED IT PROJECT) but clearly turning a blind eye to millionaires buying property in London and elsewhere in the UK. simple answer to the mansion tax is to increaase stamp duty and clamp down on aany stamp duty avoidance schemes

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