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UK tax gap stands at £32 billion

The UK ‘tax gap’, which indicates the difference between the amount of tax that should have been collected by HM Revenue & Customs, and the amount of tax that was actually collected, has risen to £32bn, according to the latest figures.

The figures for 2010/11 represent an increase of £1bn on the previous year, although HMRC’s estimate of the gap as a percentage of liabilities has fallen from 8.2% in 2004/05 to 6.7% in 2010/11.

The figures are based on 30 separate estimates relating to different taxes.

Uncollected VAT was cited as one of the main reasons for the 2010/11 shortfall.

HMRC’s Lin Homer said, ‘We are determined to do more and we are devoting increasing resources to pursuing those who do not pay the tax they owe, while making it easier for people and business to comply with the tax obligations’.