23 Jun 2025
The tax gap estimate was 5.3% for the 2023/24 tax year, according to the latest data from HMRC.
The tax gap is the difference between what tax is expected to be paid and actually paid.
HMRC collected £829.2 billion in the 2023/24 tax year representing 94.7% of all tax due, leaving £46.8 billion unpaid.
However, HMRC revised the figures upwards for 2022/23, from 4.8% (£39.8 billion) to 5.6% (£46.4 billion). It also warned that the latest figures may be revised as more data becomes available.
Some of the key findings from this year's calculations show:
- Small businesses represent the largest proportion of the tax gap (60%).
- Corporation Tax accounts for 40% of the total tax gap.
- Failure to take reasonable care (31%), error (15%) and evasion (14%) are among the main behavioural reasons for the overall tax gap.
Ellen Milner, Director of Public Policy, said: 'These figures show the stubbornness of the tax gap and how optimistic the government's target of a £7.5 billion reduction by 2029/30 is.
'While large businesses and wealthy individuals are often accused of not paying enough tax these figures suggest that their total share of the tax gap is not much more than a quarter of that of small businesses.
'The small business figures reflect big upward revisions from HMRC a year ago as a result of a random enquiry programme carried out in 2020/21, which identified greater inaccuracy and non-compliance than previously forecast.'