In this week’s Enews, we look at the latest data from HMRC on the tax gap. There is also tax guidance for Gen Zs and a plea on the cost of Brexit to business to update you on.
News - 3 July 2026
Tax gap up to more than £59 billion
The tax gap rose to a record high of £59.2 billion in cash terms for 2024/25, according to the latest data from HMRC.
The tax gap is the difference between what UK tax is expected to be paid and was actually paid.
The gap was 6.4% for the 2024/25 tax year as the tax authority collected £865.2 billion, representing 93.6% of all tax due.
HMRC estimates the tax gap using the most up to date information but figures are often revised as more data becomes available.
The percentage tax gap has fallen from 7.5% since measurement began in 2005/06, although there has been some fluctuation over that period.
HMRC said the estimates reflect the changing world in which it operates, where it is becoming more difficult to tackle non-compliance through traditional approaches alone.
Ellen Milner, Director of Public Policy at the Chartered Institute of Taxation (CIOT), said:
‘Despite the efforts of successive governments, the tax gap is proving stubbornly hard to keep down. The government’s ambitious target of a £10 billion reduction in the tax gap by 2029/30 feels very optimistic.
‘The high level of uncertainty around these figures raises questions as to how much HMRC can rely on the data in its decision making and as justification for taking particular courses of policy and compliance action, especially as year-on-year comparisons become more difficult.’
Internet link: HMRC press release | CIOT website
Gen Zs wish they had learnt basics about tax
Four in ten of Generation Z say they wish they had learnt the basics about tax when they were younger, according to data from HMRC.
The tax authority is now encouraging those looking for work this summer to download the HMRC app to find the answers they need.
It says that as exams are finishing and young people are starting their summer job search, the HMRC app can help them understand their tax affairs and money matters.
Last year, an average of 3.4 million 18–24-year-olds worked during their summer break.
HMRC says that young jobseekers have access to all the job-related details they need in the app to simplify and speed up the process when starting a new seasonal job. This includes their National Insurance number, tax code, employment history and Pay As You Earn (PAYE) details.
Myrtle Lloyd, HMRC’s Chief Customer Officer, said:
‘Downloading the HMRC app gives young people an advantage in understanding their tax affairs with instant access to information that can help demystify money matters.
‘Young people looking for their first job may not even be aware of what tax information they need. Having the HMRC app to hand will make it a lot easier.’
Internet link: HMRC press release
Brexit burden must be cut, says BCC
The UK government must set out a clear plan to ease the burdens that Brexit has placed on business, says the British Chambers of Commerce (BCC).
Over half of UK exporters think the current trade deal with the EU is making it harder to export and the need for change is urgent, according to BCC research.
There is also increasing concern among UK firms involved in European supply chains about the EU’s Made in Europe agenda.
Other key issues for business that still need to be addressed include customs red tape, VAT complexity, business mobility, mutual recognition of professional qualifications, and increased cooperation on defence.
William Bain, Head of Trade Policy at the BCC, said:
‘Businesses have been put through the wringer since Brexit, as the costs and complexity of trading with the EU have soared.
‘There is insufficient recognition and debate over the damaging effect on trade and growth this has caused. The Office for Budget Responsibility puts the long term hit to the UK’s economic growth at 4%.
‘Businesses have become increasingly frustrated because UK-EU relations don’t have to be this way. There are many steps that can be taken to simplify trade and benefit both our economies.’
Internet link: BCC website
