The tax gap in the UK - the difference between the amount owed and the sum actually received - increased to 6.4% for the 2024/25 tax year, according to HMRC, with a £59.2bn shortfall in unpaid taxes. The data shows that small businesses accounted for 62% of the gap. The tax gap for wealthy individuals - the top 2% of UK taxpayers - increased to £3.6bn from £2.5bn last year. Alongside deliberate tax dodging, tax-gap calculations include mistakes, carelessness, disputed interpretations of tax law, unpaid bills, avoidance, evasion and criminal attacks on the system. Emma Rawson, director of public policy at the Association of Tax Technicians, noted that many business owners "are trying to comply with an increasingly complex tax system while managing the day-to-day demands of running a business." Rachael Griffin, a tax and financial planning expert at Quilter, said: "Closing even a fraction of the £59.2bn tax gap could play a meaningful role in supporting the public finances without the need for further headline tax rises."
