Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the annual loss of tax revenue from small businesses.

HMRC is committed to tackling all forms of non-compliance, including evasion. Each year HMRC makes an annual assessment of the tax gap, which is the difference between the amount of tax that should, in theory, be paid, and the amount that is actually paid. The latest published tax gap is for 2022-23 and 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

The tax gap derives from a wide range of non-compliant behaviours, from simple errors at one end of the spectrum to more deliberate behaviours at the other, requiring different approaches to tackle it. The Government is committed to ensuring that businesses and individuals pay the taxes they owe.