The overall UK tax gap in the 2019/20 tax year had a value of £35bn, new HMRC figures have revealed.

This figure is estimated to be worth around 5.3% of the year’s total theoretical tax liabilities of £674bn, meaning HMRC secured 94.7% of all the tax it was due.

The tax gap is the difference between the amount of tax that should in theory be paid to HMRC, and the amount that is actually paid.

According to HMRC, there has been a long-term reduction in the overall tax gap from 7.5% in the tax year 2005/06, down to 5.3% in 2019/20. Figures also indicate that between 2016/17 and 2019/20, the overall percentage tax gap has remained low.

The latest data shows that the tax gap for income tax, national insurance contributions and capital gains tax was 3.5% in the 2019/20 tax year, at £12.6bn. By type of tax, this represented the biggest share of the total tax gap.

The next largest component to make up the total tax gap was the shortfall for value added tax (VAT), which reached £12.3bn.

Commenting on the findings, Permanent Wealth Partners co-founder, Adam Walkom, said: “These figures show HMRC is heading in the right direction. After all, we all have a legal duty to pay tax. If you don’t pay the tax you owe, you should go to jail. It’s that simple.

“But remember, we also have the opportunity to structure our financial affairs, in 100% legal ways, which minimises the legal amount of tax we have to pay. I am constantly amazed at the number of people who don’t do this. If governments want us to pay more tax, they should change the law, not try to persuade us with a moral obligation.”

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