All agree that billions are missing from HMRC coffers but Rachel Reeves may not be looking for it in the right places
Each year His Majesty’s Revenue and Customs know how much tax they would collect if all individuals and companies paid what they owed. They also know how much they have actually collected. The difference between the two figures is known as the tax gap.
In the last year for which data is available, 2021-22, the tax gap stood at £35.8bn, up £5bn on the previous year. The amount of tax owing also rose, from £642bn to £739bn, so in percentage terms the tax gap remained unchanged at 4.8%.
