Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if her Department will make an assessment of the potential merits of developing a system to tackle trends in the level of tax evasion from small businesses.

The Government is committed to tackling all forms of non-compliance, including evasion. Each year HMRC estimates the size of the tax gap, and the latest published tax gap (2022-23) was 4.8% of theoretical liabilities, or £39.8bn. The element attributable to small businesses is 60% (£24.1bn) of that overall tax gap.

HMRC publishes these estimates in its annual ‘Measuring the Tax Gap’ report. https://www.gov.uk/government/statistics/measuring-tax-gaps

Small businesses play a vital role in the UK economy and most businesses pay what they owe. A small minority fail to pay their fair share of tax, thereby depriving public services of vital funding and leading to unfair competition between businesses.