The Tax Gap: I’m sorry, we haven’t a clue

Posted on January 10 2008

Mr. Austin Mitchell: To ask the Chancellor of the Exchequer what his Department's estimate of the tax gap is; and what model his Department uses to estimate the gap. [175527]

Jane Kennedy: HM Revenue and Customs do not produce estimates for the total tax gap. The most recent estimate of the indirect tax gap is given in "Measuring Indirect Tax Losses-2007", published by HMRC in October 2007 and is available in the House of Commons Library.

There are currently no reliable estimates for the direct tax gap. However, HMRC published a discussion paper on the methodologies for estimating elements of the direct tax gap in October 2007. "Developing Methodologies for Measuring Direct Losses" is also available in the House of Commons Library.

Watch this space. That's all I have to say right now.

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