Call for urgent action as new HMRC figures show £35bn ‘Tax Gap’

Unchecked UK have today (Thursday) called on the Government to take urgent action to close the ‘tax gap’, as new figures from HMRC show that the gap between the money owing to HMRC and that collected stands at £35bn a year.

This figure is more than the UK’s entire annual spend on police, fire services, courts and prisons combined.

Figures from reveals the sum equates to:


–          More than the amount we need to fund coronavirus recovery

–          More than three times what we need to fix social care

–          More than double what is required to fund the transition to zero

–          Six-times what the Government is investing into the Levelling Up Fund’s forthcoming report: “The UK Tax Gap” explores in more detail the implications of the gap for communities across the UK, and will be published next week.

Previous research from has highlighted ​​how cuts to enforcement bodies have undermined the rules and regulation that ensure a level playing field.  HMRC is one of the most egregious examples of this trend.  Between 2000 and 2016, HMRC saw its funding slashed by 40%. The equivalent of 1987,000 years of experience were lost in 2018 alone due to staff cuts.  This is despite the fact that investment made by HMRC to recover tax generates huge returns.  When investigating large businesses HMRC gets £44 in return for every £1 invested.

Polling by Unchecked UK has shown a tremendous public appetite to ensure that tax collection is fair. Recent surveys conducted in Wales showed that 76% of voters think that regulations which prevent people and companies from avoiding tax should be more strongly enforced.  And previous Unchecked UK research has shown that young voters in Red Wall seats are significantly more likely to support stronger regulations on tax, rather than a weakening of existing safeguards.

The organisation has produced an interactive “Tax Gap Map”, showing the local tax gap in each constituency in the UK and how the missing money could be used to pay for more GPs, teachers, and other local services.

Phoebe Clay, Director, Unchecked UK, said:

“Today’s figures clearly demonstrate that Government needs to make an immediate and ambitious commitment to close the tax gap. While a 2% reduction in tax liabilities since 2005 represents progress of sorts, the gap remains stubbornly high.

“We know that enforcement bodies like HMRC have seen their funding slashed in the past decade, resulting in fewer investigations and people available to ensure the rules are followed.  But this is a false economy.  Investment into enforcing tax rules will pay for itself multiple times over. The Government must make it a priority to provide HMRC with the resources they need to get the job done and to collect the money owed to all of us.

“At a time when Britain is looking to build back better, make the transition to net zero, pay for an ageing population and level up its economy, we can’t afford a tax gap of this scale. If HMRC were a business, UK taxpayers would be its shareholders. We should demand a better deal.”


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Lisa Baker is the Editor of Always Finance, and writes about Business, Finance Technology and Healthcare. Lisa is also the owner of Need to See IT Publishing.