Committee publication · Correspondence · 24 June 2025

Correspondence from HM Revenue and Customs, on tax gap estimates for 2023 to 2024, dated 19 June 2025

Summary

HMRC writes to the Treasury Committee chair to announce publication of its 2025 tax gap analysis, reporting the tax gap at 5.3% (£46.8 billion) for 2023-24. The letter emphasises stable tax gap levels since 2017-18, notes upward revision of prior-year estimates due to improved ONS data and methodology, and outlines planned recruitment of 7,900 staff funded by the Spending Review to generate £7.5 billion in additional annual tax revenue by 2029-30.

Key findings

Tax gap estimated at 5.3% or £46.8 billion for 2023-24; £829.2 billion collected (94.7% of estimated tax due)
Tax gap has remained broadly stable at around 5.5% since 2017-18, down from 7.4% in 2005-06
Prior-year estimate for 2022-23 revised upwards from 4.8% to 5.6% due to improved ONS consumer expenditure data and enhanced non-payment methodology
Spending Review funding of £1.7 billion over four years to recruit 5,500 compliance and 2,400 debt management staff, targeting £7.5 billion annual extra tax revenue by 2029-30
UK tax gap estimates compared favourably internationally where comparable data is published

Tone

Factual

Topics

public-financetax-compliancetax-administration

Key actors

John-Paul Marks, Dame Meg Hillier, HMRC (Her Majesty's Revenue and Customs), Office for National Statistics, UK Government

Notable line

“… the tax gap is estimated to be 5.3%, or £46.8 billion, of total theoretical liabilities in 2023-24.”

Key Quotes

“… the tax gap is estimated to be 5.3%, or £46.8 billion, of total theoretical liabilities in 2023-24.”
— John-Paul Marks · Primary tax gap finding for 2023-24

“Whilst there has been some fluctuation in subsequent years the tax gap has been broadly stable since at around 5.5% and was 5.3% in 2023-24.”
— John-Paul Marks · Long-term tax gap trend assessment

“This will enable HMRC to raise £7.5 billion a Information is available in large print, audio and Braille formats.”
— John-Paul Marks · Impact of Spending Review staffing investment

“We publish the tax gap because we believe that it is important to be transparent in our work.”
— John-Paul Marks · Rationale for publishing annual tax gap estimates

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Source · parliament.uk record ↗