HMRC publishes its preliminary estimate of UK’s VAT Gap for 2018/2019
The UK Government’s department responsible for the collection of taxes, has published its preliminary estimate of the VAT Gap for 2018-2019.
According to the HMRC, ‘The ‘VAT gap’ is the difference between the VAT theoretical liability, estimated using national accounts data, and actual cash receipts.’
The findings indicate that VAT total theoretical liability (VTTL) stood at £10bn GBP, or 7% during the period.
The release of the preliminary report follows the recent Spring Budget, announced via the Chancellor of the Exchequer earlier this week.
According to the most recent report from the EU Commission, relating to the year 2017-2018, it suggests that the UK’s overall total VTTL has reduced significantly from £19bn GBP during the previous period, or approximately -5%.
Details are scarce for the reason for the reduction in the VAT Gap amount, although several sources indicate that the HMRC’s Making Tax Digital initiative may have played a role in lowering the VTTL.