Any contractors currently at work in the UK as either limited companies, sole traders or an through an umbrella company may be interested in a new series of figures recently published by HM Revenue & Customs.
HMRC has announced the release of their new report, which has been entitled “Measuring the Tax Gap,” and it reveals that the amount of taxes that went unpaid in the 2008-2009 fiscal year totaled a hefty £42 billion.
According to HMRC, the tax gap measurement is reached by calculations that compare the total amount of tax due for the year against the amount of tax that was actually paid for that same time period, which then determines the size and severity of the gap.
At £42 billion, which over half of that figure is from National Insurance, income tax, and other direct taxes, the figure accounts for 9 per cent of the country’s entire tax liability, the HMRC stated.
However HMRC stressed that due to their use of new, untested, and complicated calculation methods, the total figure cited by the report may not be entirely accurate.
Financial expert and report author Kerry Booth, commented on the report’s findings, stating that estimates have been developed by HMRC for tax gaps in regards to both the main indirect and direct taxes that it collects, and that the current belief is that the results are as accurate as possible in light of the available data, but HMRC will continue to examine the methodologies involved in the calculations and is not afraid to re-evaluate their findings in the even that new data and information is made available.
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