By Mark Jones, director of Carmarthen-based Clay Shaw Butler chartered accountants and business consultants.
The taxman at HMRC has confirmed that the tax gap for 2016/17 has fallen to 5.7%.
The ‘tax gap’ is the difference between the tax that should theoretically be paid to HMRC and the actual tax that has been paid.
HMRC believes that the tax gap is lower as a result of its work to help taxpayers get things right from the start, and the department’s sustained efforts to tackle evasion and avoidance.
Key findings from the Measuring the Tax Gap publication include:
- small businesses made up the largest proportion of unpaid tax by taxpayer group at £13.7 billion
- taxpayer errors and failure to take reasonable care made up £9.2 billion of unpaid taxes by behaviour, while criminal attacks made up £5.4 billion
- income tax, national insurance contributions and capital gains tax made up the largest proportion of the tax gap by tax type at £7.9 billion for 2016/17; equivalent to 16.4% of self assessment liabilities
- the VAT gap showed a declining trend over time, falling from 12.5% in 2005/06 to 8.9% in 2016/17.
Mel Stride, the Secretary to the Treasury, said:
“These really positive figures show that the tax gap is the lowest in the last five years, which reflects the hard work that HMRC and I have been doing to ensure we support businesses to pay the right tax at the right time and clamp down on tax evasion and avoidance.
“Collecting taxes is essential for funding our vital public services such as the NHS – indeed, had the tax gap remained at its 2005/06 level the UK would have lost £71 billion in revenue destined for public services, enough to build 200 hospitals.”
Internet link to the Government website –
https://www.gov.uk/government/news/low-tax-gap-results-in-71-billion-for-uk-public-services
In other news, a plumber has won a legal battle for working rights in a Supreme Court ruling.
The Supreme court has backed up an earlier ruling by an Employment Tribunal in the case of a contractor engaged by Pimlico Plumbers.
Plumber Gary Smith carried out plumbing jobs for Pimlico Plumbers.
He was VAT registered and paid tax on a self-employed tax basis.
The Supreme Court has ruled that Gary Smith was entitled to workers’ rights and confirmed that the Employment Tribunal was ‘entitled to conclude’ that Mr Smith was a worker.
As a worker, Mr Smith was entitled to rights including holiday and sick pay.
Details of workers’ rights can be found on the following Government website link –
https://www.gov.uk/employment-status/worker
Pimlico Plumbers chief executive Charlie Mullins said that he was “disgusted by the approach taken to this case by the highest court in the United Kingdom.”
He added: “This was a poor decision that will potentially leave thousands of companies, employing millions of contractors, wondering if one day soon they will get a nasty surprise from a former contractor demanding more money, despite having been paid in full years ago.
“It can only lead to a tsunami of claims.”
Internet link for more information and press summary –
https://www.supremecourt.uk/cases/docs/uksc-2017-0053-press-summary.pdf
You can find out more about money matters on the Clay Shaw Butler website (under our news for business section) –
http://www.clayshawbutler.com/news/latest-news-for-business
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