{"id":27749,"date":"2026-07-30T11:14:25","date_gmt":"2026-07-30T10:14:25","guid":{"rendered":"https:\/\/www.moorethompson.co.uk\/blogs\/?p=27749"},"modified":"2026-07-30T10:14:28","modified_gmt":"2026-07-30T10:14:28","slug":"the-tax-gap-has-grown-time-for-small-businesses-to-take-action","status":"publish","type":"post","link":"https:\/\/www.moorethompson.co.uk\/blogs\/the-tax-gap-has-grown-time-for-small-businesses-to-take-action\/","title":{"rendered":"The tax gap has grown \u2013 Time for small businesses to take action"},"content":{"rendered":"

By Heather Bright, Partner<\/em><\/p>\n

Since the 2005\/6 tax year, HMRC has been diligently tracking the amount of tax that is owed but not paid by individuals and businesses in the UK.<\/p>\n

<\/p>\n

Known as the tax gap, this void in the public purse has been the catalyst for many reforms over the years and monitoring it can give an indication of what might change in the future.<\/p>\n

The tax gap has grown and small businesses are being blamed, so now is the time to understand how to stay tax compliant before further crackdowns are imposed.<\/p>\n

Are small businesses responsible for the growing tax gap?<\/strong><\/h3>\n

If it feels familiar that we are discussing the contribution of small businesses to the tax gap, then it is with good reason.<\/p>\n

Consistently over the past five years, small businesses have been disproportionately responsible for the value of the tax gap.<\/p>\n

Their current contributions amount to 62 per cent of the total value, a figure that has not significantly shifted in recent memory.<\/p>\n

This means that of the record high cash value tax gap, now totalling around \u00a359.2 billion, approximately \u00a336.7 billion of tax is not being paid by small businesses.<\/p>\n

Mid-size businesses have shown slight improvements as their contribution was 13 per cent at the start of the decade and has since fallen to eight per cent.<\/p>\n

Combined, businesses classified as SMEs make up 70 per cent of the value of the tax gap or around \u00a341.44 billion.<\/p>\n

The record high value of the tax gap is connected to the largest tax haul in history, but the percentage left on the table should be a cause of concern.<\/p>\n

The tax gap makes up 6.4 per cent of the total tax bill, up from 6 per cent the previous year.<\/p>\n

While this is below the historic high of 7.5 per cent recorded in the 2005\/6 tax year, it is worrying that the tax gap is growing.<\/p>\n

What can be done to address the tax gap?<\/strong><\/h3>\n

HMRC has committed to ensuring that small businesses improve tax compliance, but the lack of meaningful change among this demographic might force tighter compliance measures.<\/p>\n

Instead of waiting around to be forced into stricter tax rules, it is worth addressing the root issue that underpins the tax gap.<\/p>\n

Small businesses are not engaging enough with tax either due to a lack of knowledge, confidence, resources or some combination of the three.<\/p>\n

Fortunately, seeking the support of accountants could help rectify the situation.<\/p>\n

Our team can review your tax obligations to ensure that everything is filed as and when it should be.<\/p>\n

It might seem odd that large companies are more tax compliant than small ones, but the reason behind this is likely a better sense of how to be tax efficient.<\/p>\n

Once a business is tax-efficient, the confidence in paying the tax bill increases. You know that everything has been calculated correctly and that the amount you are being asked to pay is what you rightfully owe.<\/p>\n

HMRC still has a \u00a310 billion reduction in the tax gap as a target by 2029\/30, so we can expect a greater focus on achieving this in the coming months and years.<\/p>\n

Getting on top of your tax now will avoid the current penalty system and keep you safe from any future changes.<\/p>\n

If you want to take control of your tax bill, <\/strong>speak to our team today<\/strong><\/a>. <\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

By Heather Bright, Partner Since the 2005\/6 tax year, HMRC has been diligently tracking the amount of tax that is … The tax gap has grown \u2013 Time for small businesses to take action<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[26,128,3,30],"tags":[],"class_list":["post-27749","post","type-post","status-publish","format-standard","hentry","category-blog","category-heather-bright","category-tax","category-tax-blog"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.moorethompson.co.uk\/blogs\/wp-json\/wp\/v2\/posts\/27749","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.moorethompson.co.uk\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.moorethompson.co.uk\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.moorethompson.co.uk\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.moorethompson.co.uk\/blogs\/wp-json\/wp\/v2\/comments?post=27749"}],"version-history":[{"count":1,"href":"https:\/\/www.moorethompson.co.uk\/blogs\/wp-json\/wp\/v2\/posts\/27749\/revisions"}],"predecessor-version":[{"id":27750,"href":"https:\/\/www.moorethompson.co.uk\/blogs\/wp-json\/wp\/v2\/posts\/27749\/revisions\/27750"}],"wp:attachment":[{"href":"https:\/\/www.moorethompson.co.uk\/blogs\/wp-json\/wp\/v2\/media?parent=27749"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.moorethompson.co.uk\/blogs\/wp-json\/wp\/v2\/categories?post=27749"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.moorethompson.co.uk\/blogs\/wp-json\/wp\/v2\/tags?post=27749"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}