{"id":26849,"date":"2024-07-12T11:39:55","date_gmt":"2024-07-12T10:39:55","guid":{"rendered":"https:\/\/smh.group\/?p=26849"},"modified":"2024-07-12T11:39:55","modified_gmt":"2024-07-12T10:39:55","slug":"tax-gap-increases-to-record-amount","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/tax-gap-increases-to-record-amount\/","title":{"rendered":"Tax gap increases to record amount"},"content":{"rendered":"<p><strong>In 2022\/23, the tax gap reached a record \u00a339.8 billion, with small businesses responsible for approximately 60% of uncollected taxes.<\/strong><\/p>\n<p>The tax gap is the difference between the amount of tax that should, in theory, be paid to HMRC and, , what is actually paid. Despite the record high receipts in monetary terms, the overall tax gap has fallen in percentage terms. It is now estimated that 4.8% of taxes are unpaid compared with 7.4% back in 2005\/06.<\/p>\n<h3><strong>Small companies<\/strong><\/h3>\n<p>The worst offenders are small limited companies, with the amount of unpaid corporation tax now standing at \u00a310.9 billion, nearly triple the \u00a33.7 billion of five years ago. This means:<\/p>\n<ul>\n<li>In percentage terms, the tax gap for small companies is a somewhat alarming 32.2%.<\/li>\n<li>Some 45% of small businesses have submitted an incorrect corporation tax return containing an under-declared tax liability.<\/li>\n<\/ul>\n<p>By comparison, the tax gap for mid-sized companies is 6.7%, and for large companies is 2.9%.<\/p>\n<h3><strong>High tax take<\/strong><\/h3>\n<p>The recently released figures also give a stark illustration of how much the tax take has increased:<\/p>\n<ul>\n<li>The theoretical amount of tax liabilities has been growing at around 15% a year, increasing from \u00a3640.1 billion for 2020\/21 to \u00a3823.8 billion in 2022\/23.<\/li>\n<li>The theoretical amount has nearly doubled since 2005\/06.<\/li>\n<\/ul>\n<p>Tax receipts as a proportion of GDP over the past 20 years have previously been steady at around 28% but now stand at just over 30%.<\/p>\n<h3><strong>Behaviour<\/strong><\/h3>\n<p>The two types of behaviour contributing most to the tax gap are:<\/p>\n<ul>\n<li>failure to take reasonable care; and<\/li>\n<li>criminal actions.<\/li>\n<\/ul>\n<p>Failure to take reasonable care means not spending the time and effort to make sure reported figures are correct. Directors of limited companies are generally expected to exercise a higher level of reasonable care compared to small sole traders.<\/p>\n<p>If you need help with your tax liabilities, please get in touch.<\/p>\n<p>HMRC\u2019s summary of the latest tax gap figures can be found <a href=\"https:\/\/www.gov.uk\/government\/statistics\/measuring-tax-gaps\/1-tax-gaps-summary\" target=\"_blank\" rel=\"noopener\">here<\/a>.<\/p>\n<p>For more information,\u00a0<a href=\"https:\/\/devstagesite.co.uk\/smhgroup\/contact\/\">contact us<\/a>\u00a0on\u00a0<strong>0114 266 4432<\/strong>\u00a0or email\u00a0<a href=\"mailto:info@smh.group\"><strong>info@smh.group.<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In 2022\/23, the tax gap reached a record \u00a339.8 billion, with small businesses responsible for approximately 60% of uncollected taxes.<\/p>\n","protected":false},"author":4,"featured_media":26851,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[3],"tags":[],"class_list":["post-26849","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-smh-accounting-business-advisory"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.9 - 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