The UK tax gap hit £36 billion in 2021/22 out of a total expected tax take of £739bn, according to the latest HMRC figures.
The tax gap is the difference between what HMRC expected in tax receipts and what it actually received, with the £36bn ‘missing' payments constituting 4.8% of tax liabilities - the same percentage as 2020/21.
Small businesses failed to pay £20.2bn in taxes in 2021/22, representing more than half (56%) of the total estimated tax gap.
Large businesses accounted for just £3.9bn in unpaid taxes (11%), while mid-sized businesses were responsible for £3.8bn (also 11%).
High-net-worth individuals were responsible for 5% (£1.7bn) of the tax gap, with all other individuals accounting for the remaining 6% (£2.1bn).
As for the behavioural reasons behind the tax gap, HMRC found that almost a third (30%) of all underpayments were due to taxpayers not taking "reasonable care" to get their taxes right, and 15% were due to "error".
Jonathan Athow, HMRC's director general for customer strategy and tax design, said:
"We want to ensure everyone pays the correct amount. These figures show most taxpayers and businesses pay what they should.
"This important research enables us to help those making common mistakes or failing to take sufficient care, as well as tackling the minority deliberately hiding their income."
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