This was mainly the result of uncollected VAT, but any other tax that is bypassed or where taxes cannot be collected because of insolvency are all reasons behind the lack of collection.
The amount of VAT that went uncollected rose from £8.6bn to £9.6bn in the financial year to March 2011, while the shortfall in direct taxes on individuals, including national insurance, income tax and capital gains tax, rose £300m to £14.4bn. Unpaid corporation tax also rose by around £300m to £4.1bn. However, the actual proportion of tax that was uncollected went down from 7.1 per cent to 6.7 per cent over the same period.
The Treasury ‘pot’ should increase by a certain amount each year, calculated by HMRC, and when there is any shortfall, this is known as the tax gap.
HMRC’s tax gap estimates go back as far as 2004/5.
These estimates are regularly revised to take account of the latest available information, which can be difficult because it can take a long time to settle some tax enquiries. These most recent figures include revisions going back to 2004, including downward revisions by the Office for National Statistics (ONS) that affect the gap.
However, according to HMRC, the UK is comparatively efficient in tax collection, with the 6.7 per cent proportional figure comparing favourably to the 14 per cent tax gap in the US, for example.
Last year £468.9bn was collected, including £13.9bn brought in through HMRC's work policing the rules through crackdowns and investigations into various business sectors.
In the 2010 Spending Review, HMRC was given £917m in funding by the Government to tackle the tax gap, with a target to raise an extra £7bn a year by 2014-15.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
[ add comment ] ( 6 views ) | permalink |
( 3 / 676 )
Random Entry
