The VAT tax gap is up – and that has to be the consequence of fewer staff to collect it

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HMRC have this week given publicity to their initial estimate of the VAT tax gap for 2012 - 13.  This is their estimate of the amount of VAT that should have been paid if UK law had been complied with compared to the amount of VAT that was actually received by them in that year.  This is what it looks like:

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 I will have a lot more to say on this issue shortly.  Suffice for now to say that the VAT  tax gap  has increased and  That cannot be down to changes in VAT rates on this occasion: this must be down to inadequate resources.

The simple fact is, you cannot  sacks staff at HMRC  without consequences. This  increase in the VAT tax gap is one of them.