David Pedley and Sarah Mawson explain what the tax gap is, how it is calculated, and what HMRC is doing to try to reduce it.
There is much debate concerning the need to increase public borrowing or taxes due to the impact of the government’s response to Covid. In recent days we have again seen calls for the introduction of a one-off UK wealth tax, suggesting a 5% charge on net assets over £500,000 could raise more than £260bn.
Attention has also turned to how much of the current tax take is not collected and how much more efficient HMRC could, or should be, in collecting what is already legislated for, as well as the inevitable speculation as to how HMRC may go about this. But how much more can HMRC realistically achieve?
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