That published documentation being the report that shows that HMRC had estimates of the tax gap from 2004.
Four years before Ritchie\’s report.
But in 2004 HMRC did some preliminary work, which was heavily based on assumptions and experience in other countries, to provide a broad handle on the range in which the gap might fall. This work, which is the subject of the FoI, estimated the overall tax gap as lying in a range of £ 11-40bn p.a. (including £5bn-15bn being attributable to avoidance) – see attachment for details. The methodology was not robust and that is basically why we resisted the FoI request, but the overall figures at 4-16% of total tax yield were broadly consistent with the 8-13% that has been calculated in other countries.
But look at that very interesting little bit at the end. Ritchie tells us that the tax gap is £120 billion.
Total tax take this year just gone was £500 billion or so. So Ritchie is telling us that the tax gap is 24-25% of the amount raised.
And yet calculations of other countries (and thus leaving aside whatever it is/isn\’t that HMRC does right or wrong about their calculations) are of 8-13%. £40 billion to £65 billion.
Who are we to believe on such matters? The assembled tax authorities of the world or a retired accountant from Wandsworth?
Interesting poser that, really.