Call for urgent action as new research shows UK ‘Tax Gap’ costs Wales more than £1.5bn

Call for urgent action as new research shows UK ‘Tax Gap’ costs Wales more than £1.5bn

Unchecked UK have today (Thursday) called on the UK Government to take urgent action to close the ‘tax gap’, as new figures from HMRC show that in Wales, the gap between the money owing to HMRC and that collected is £1.52bn  –  equivalent to more than twice the additional funding provided by the UK Government for pandemic support in Wales.

The money owed would also be enough to hire 59,141 teachers, 59,277 nurses or 25,860 GPs in Wales.

Across the UK, the gap between the money owed to HMRC and that collected stands at £35bn a year.  This figure is more than the UK’s entire annual spend on police, fire services, courts and prisons combined.

Unchecked UK’s report, “The UK Tax Gap”, published today, analyses the figures and explores the drivers.

Polling by Unchecked UK has also shown a tremendous public appetite to ensure that tax collection is fair.  Recent surveys showed that 76% of voters in Wales think that regulations which prevent people and companies from avoiding tax should be more strongly enforced.

Previous research from Unchecked UK has highlighted how cuts to enforcement bodies have undermined the rules and regulation that ensure a level playing field.  HMRC is one of the most egregious examples of this trend.  Between 2000 and 2016, HMRC saw its funding slashed by 40%.  The equivalent of 17,000 years of experience were lost in 2018 alone due to staff cuts.  This is despite the fact that investment made by HMRC to recover tax generates huge returns.  On average, every £1 that HMRC invests in pursuing unpaid tax returns £15.


Phebe Clay, Director, Unchecked UK, said:

“These figures clearly demonstrate what a difference this missing cash could make to Wales – especially in light of a decade of austerity that leaves like-for-like funding in Wales below 2010 levels.  But rather than confronting the facts – which show that the tax gap has grown over the last year – the UK Government has chosen to try and massage the figures to point to progress where little really exists.

“We know that enforcement bodies like HMRC have seen their funding slashed in the past decade, resulting in fewer investigations and fewer people available to ensure the rules are followed.  But this is a false economy.  Investment into enforcing tax rules will pay for itself multiple times over. The UK Government must make it a priority to provide HMRC with the resources they need to get the job done and to collect the money owed to all of us.

“At a time when Wales is looking to build back better, make the transition to net zero, pay for an ageing population and level up its economy, we can’t afford a tax gap of this scale. If HMRC were a business, Welsh taxpayers would be its shareholders. We should demand a better deal.”

About Unchecked UK

Unchecked UK makes the case for common-sense protections which help keep people safe and allow businesses to thrive. We are a rapidly growing network of leading and diverse civil society organisations who see sensible, properly enforced protections as the framework for a decent society – where the food we eat and the things we buy can be trusted, the natural environment is protected, our homes and workplaces are safe, and our rights are safeguarded.

We carry out research and investigations to highlight the loss of protection for the UK public that results from the erosion of important regulations and of the public bodies which enforce them. Closing the UK’s tax gap would make it easier to protect the things that matter most to the public.

We are a non-partisan organisation, incubated as a project of The Ecology Trust.  Find out more about our work at

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