The tax gap for big businesses, created by underpaid and evaded tax, rose 15 per cent in the 12 months leading up to March 31st 2020, peaking at £6.1 billion – up from the £5.3 billion seen in 2019.
Research from law firm Pinsent Masons, seen by City A.M, shows that the overall tax gap for the UK rose from £33 billion in 2018/2019 to £35 billion in 2019/2020, although the gap for wealthy individuals did close slightly, dropping from £1.6 billion to £1.5 billion.
This rise was seen despite the fact that HMRC has been steadily increasing its powers to reclaim underpaid and evaded tax by large corporations over the last few years.
Partner at the law firm Clare Boyd commented on the findings, saying HMRC will now be looking to close this tax gap as the country recovers from the coronavirus crisis, with the fall seen in the high net work tax gap a demonstration of how aggressive the organisation has been in the investigation of the tax affairs of wealthy individuals.
Ms Boyd went on to say: “The Treasury believes it is missing out on tax paid by wealthy individuals. While routine audits were suspended for a period during the pandemic, there will likely be a focus on increasing income from investigations quite aggressively as lockdown has ended.”
“Although HMRC has said that the tax residence of individuals stranded in the UK during the pandemic won’t be affected, extra time in the UK may lead to greater scrutiny of an individual’s tax situation more generally.”
An HMRC statement on the tax gap was issued on September 16th, revealing that almost 95 per cent of the tax due in the 2019-2020 tax year was, in fact, paid and the organisation has seen a rise in total revenue paid year on year.
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