Britain's £34bn uncollected 'tax gap' is no worse than other countries', says HMRC tax head

Edward Troup says the tax authority is doing its job well

The amount of tax going uncollected in the Britain is no worse than in other countries around the world, a senior official at the tax authority has said.

Edward Troup, HMRC’s tax assurance commissioner, told the House of Commons Treasury Select Committee that the £34 billion tax gap was broadly similar to that in other countries

The figure, which includes tax avoided and evaded, as well as unintentional errors made by the tax authority and taxpayers, represents 6.4 per cent of all tax collected.

“I think the thoughtful readers and commentators will take some reassurance from the tax gap figures, particularly when compared with international comparisons: that we are doing a good job, there is not an amount of money not being collected that is significantly out of line with our competitors,” he said.

“I think on many if not most accounts the UK is doing as well if not better than most other tax administrations.” 

A report by Parliament’s Public Accounts Committee warned earlier this month that HMRC had made “little or no progress” on increasing transparency around tax avoidance.

The committee says the tax authority should report on how much cash it receives from its compliance work and on the scale of aggressive tax avoidance.  

Mr Troup however said the UK was the only country in the world to regularly and accurately publisheda tax gap figure. This makes direct international comparison difficult.

The gap is the amount of tax between what the law says should be collected by HMRC and the amount actually collected in over the same period.

The tax assurance commissioner is responsible for setting tax policy and collection strategy and oversees tax settlements and deals with wealthy companies and individuals.

David Gauke, the Financial Secretary to the Treasury, said last month that “the UK has one of the lowest tax gaps in the world” and that the Government was “determined to continue fighting evasion and avoidance wherever it occurs”.

“There is understandable anger when individuals or companies are perceived not to be contributing their fair share, but we can reassure the public that the proportion going unpaid is low and this government is dedicated to bringing it down further,” he said.

The tax gap increased last year, though the Government argues that it is on a “long-term downward trend”.

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