Committee publication · Correspondence · 30 June 2026
Correspondence from the First Permanent Secretary and Chief Executive of HM Revenue and Customs on Measuring Tax Gaps 2026, dated 23 June 2026
From: Treasury Committee
Inquiry: Work of HM Revenue and Customs
Summary
John-Paul Marks, HMRC's Chief Executive, writes to Treasury Committee Chair Dame Meg Hillier transmitting the 2026 Measuring Tax Gaps report. The UK tax gap for 2024-25 is estimated at 6.4% (£59.2 billion). HMRC notes the figure is down from 7.5% since 2005-06, highlights record £48 billion compliance yield in 2024-25, and outlines investment of £1.7 billion and recruitment of 5,500 staff to tackle non-compliance.
Key findings
- Provisional UK tax gap for 2024-25: 6.4% of theoretical liabilities, equivalent to £59.2 billion
- Tax gap has declined from 7.5% since measurement began in 2005-06; broadly stable in recent years as percentage of receipts
- Small business non-compliance accounts for 60% of total tax gap; large business tax gap on long-term downward trend
- HMRC collected record £48 billion compliance yield in 2024-25; targeting £50.4 billion in 2025-26, rising to over £60 billion by 2029-30
- Government investment of £1.7 billion in HMRC technology, data, and people; 5,500 staff recruitment ahead of schedule with 2,300+ already hired
Tone
FactualTopics
public-financetax-compliancerevenue-administration
Key actors
John-Paul Marks, Dame Meg Hillier, HM Revenue and Customs (HMRC), UK Government
Notable line
“The tax gap is down from 7.5 per cent since measurement began in 2005-06.”
Key Quotes
“The report estimates that the provisional tax gap is 6.4%, or £59.2 billion, of total theoretical liabilities in 2024-25.”
“HMRC is internationally recognised as a leader in the field of estimating tax gaps, and we are the only revenue authority in the world that measures and publishes the tax gap to this extent every year.”
“The small business tax gap is mostly due to relatively small sums amplified across a population of more than five million businesses; some of this is error, some is careless and some is more deliberate behaviour.”
“The large business tax gap remains low – with large business unpaid tax as a share of the overall tax gap on a long-term downward trend.”
“Our compliance interventions are bringing in more than ever before: in 2024-25, we collected and protected a record £48 billion in compliance yield.”
Source · parliament.uk record ↗