14th September 2026
The tax gap is the difference between the amount of tax that should theoretically be paid to HMRC and the amount actually paid.
HMRC’s latest figures estimate that the UK tax gap for the 2024/25 tax year was £59.2 billion, equivalent to 6.4% of total theoretical tax liabilities. In other words, HMRC estimates that it collected 93.6% of the tax that was due.
Importantly, the tax gap is not simply the result of deliberate tax evasion.
It includes tax lost for a number of reasons, including errors, failure to take reasonable care, differences in legal interpretation, non-payment, avoidance, evasion and criminal attacks.
HMRC estimates that failure to take reasonable care accounted for the largest share of the tax gap by behaviour in 2024/25, at 35%, followed by errors at 16% and evasion at 12%.
That distinction is important. Businesses do not have to be deliberately avoiding tax to find themselves facing questions from HMRC.
Closing the tax gap is an explicit HMRC priority, and the department is investing in additional resources and technology to support its compliance work.
More than 1,600 additional compliance caseworkers joined HMRC during 2025/26, with recruitment continuing towards the government’s commitment to recruit 5,500 additional compliance staff by 2029/30. HMRC is also developing tools to support and accelerate the work of its compliance officers.
These tools include a vast amount of information sharing between banks, overseas tax authorities, online marketplaces, property managers, credit agencies. HMRC are increasingly leveraging AI tools and publicly available data from social media, online reviews, bank transaction data and the like to identify missing tax.
Taken together, these measures point towards continued scrutiny of whether the correct amount of tax is being declared and paid.
An increased focus on compliance doesn’t necessarily mean businesses need to do anything dramatically different. However, it does make good tax administration increasingly important.
Businesses should make sure that:
Good record keeping isn’t simply about being prepared for an HMRC enquiry. It can also make it easier to prepare accurate accounts, understand the financial position of the business and make informed decisions throughout the year.
Receiving a letter or enquiry from HMRC does not automatically mean that something is wrong.
HMRC may ask for additional information or investigate particular areas of a tax return as part of its compliance activity. However, it is important not to ignore correspondence or provide information without first understanding exactly what HMRC is requesting.
If you receive an unexpected letter, enquiry or information request from HMRC, speaking to your accountant at an early stage can help establish what is required and ensure the matter is handled appropriately.
An HMRC enquiry can be time-consuming and costly, even if you have done nothing wrong.
At Thompson Jenner, we offer HMRC Fee Insurance to help cover our professional fees if you face an HMRC enquiry or investigation.
With these costs potentially running into thousands of pounds, having cover in place can provide peace of mind and help avoid unexpected expenses.
As HMRC continues its efforts to close the tax gap, accurate records and careful tax compliance are likely to remain firmly in focus.
For most businesses, the best approach is straightforward: keep good records, understand your responsibilities, meet your filing deadlines and seek advice when something is unclear.
