As families struggle to pay their bills and are forced to cut back on their food shop, the government has revealed that £32 billion went unpaid in tax last year.
The tax gap is the difference between the amount of tax that theoretically should be paid to the HMRC and the amount that is actually paid.
The gap for the tax year 2020 to 2021 stands at just over five per cent, the HMRC revealed on Thursday. This equates to £32 billion in missed revenue, or the same amount to pay for free school meals for every child in a household on universal credit for the next 40 years. The government recently declined to extend the free school meals programme because of the cost involved.
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The tax gap is down slightly on last year, when the HMRC coffers were £34 billion short, but it comes at a time when people are facing significant concerns about the cost of living crisis.
Charities have warned that families are “making impossible choices between paying rocketing food bills or rent”, and millions of people are experiencing poverty.
The corporation tax gap is the highest at nine per cent, meaning businesses did not pay £5.6 billion in taxes.