Tax Gap 2024-25 estimated at 6.4%

23 Jun 2026 11:53 AM

HMRC publishes the estimated tax gap for the 2024 to 2025 tax year.

• The estimated provisional UK tax gap for the 2024 to 2025 tax year is 6.4% or £59.2 billion.
• The largest share of the 2024 to 2025 tax gap estimate is from small businesses’ non-compliance.
• The government has already announced plans to raise a further £10 billion a year by 2029 to 2030 through its measures to close the tax gap.

The tax gap estimate – the difference between what UK tax is expected to be paid and was actually paid – was 6.4% for the 2024 to 2025 tax year, provisional figures published today (23 June 2026) show.

HM Revenue and Customs (HMRC) collected £865.2 billion in 2024 to 2025, representing 93.6% of all tax due. This means an estimated £59.2 billion was unpaid that tax year.

HMRC estimates the tax gap using the most up to date information, and figures are often revised as more data becomes available.  

The percentage tax gap has fallen from 7.5% since measurement began in 2005 to 2006, although there has been some fluctuation over that period.

In line with standard practice, previous years’ tax gap estimates have been amended as part of today’s announcement, and our estimates for several earlier years have increased, including a new estimate for 2022 to 2023 of 6.6%.

This is due to improvements in data quality, the availability of more up-to-date information and methodology changes. HMRC has used this approach of revising past tax gaps since the department was created.

Key findings from the latest estimates show:

• Corporation Tax accounts for a 35% share of the total tax gap.
• small businesses continue to represent the largest customer group of the tax gap (62%).
• around half of the small business tax gap is for Corporation Tax.
• failure to take reasonable care (35%) – due to carelessness or negligence - remains the largest behavioural risk to the tax gap, followed by error (16%) and evasion (12%).

JP Marks, HMRC Chief Executive and First Permanent Secretary, said:

Today’s estimates reflect the changing world in which HMRC operates, where it is becoming more difficult to tackle non-compliance through traditional approaches alone. That is why our aim is a well-designed modern tax system that makes it easier to get things right first time and harder to get things wrong, and which allows us to respond effectively to non-compliance and tackle criminal activity.

Measuring the tax gap helps us track long-term trends, which influence our policies and compliance strategy, allowing us to focus our efforts in the right places. In 2024-25, we collected and protected a record £48 billion in compliance yield. This is money that would have gone unpaid without our intervention.

The government’s Spending Review 2025 allocated £1.7 billion to HMRC over four years to fund an additional 5,500 compliance and 2,400 debt management staff to enable us to meet compliance risks head on.

In total, measures to close the tax gap, announced by the government since Autumn Budget 2024, will raise a further £10 billion a year by 2029 to 2030.

Further information

The Measuring Tax Gaps 2026 edition: Tax gap estimates for 2024 to 2025 was published on 23 June 2026.

In line with standard practice, previous years’ tax gap estimates have been amended as part of today’s announcement, including revising upwards the provisional tax gap estimate for 2023 to 2024, published last year, from 5.3% (£46.8 billion) to 6.0% (£52.8 billion). Similarly, the data for the 2022 to 2023 tax year has again been revised upwards from 4.8% in 2024, to 5.7% in 2025, and to 6.6% in 2026.

Other findings show:

• the tax gap proportion from Income Tax, National Insurance contributions and Capital Gains Tax combined account for a 35% share and the VAT gap a 20% share
• by percentage value (not share) the Corporation Tax gap has increased to 18.1%, while the tax gap percentage values for the VAT gap (6.6%), excise duties (5.5%); Income Tax, NICs and Capital Gains Tax (4.0%) show a largely long-term downward trend

The Measuring Tax Gaps figure for tax liabilities is £865.2 billion. The HMRC Annual Report and Accounts 2024 to 2025 revenue raised figure is £875.9 billion. That figure includes elements not included as part of the tax gap calculation, including student loan recoveries, fines and penalties.

HMRC’s tax gap estimates are official statistics produced in accordance with the Code of Practice for Statistics, which assures objectivity and integrity. Tax gap estimates are reviewed each year to reflect updated data and methodologies.