Recommendation 27

We asked HMRC about its confidence in the accuracy of these estimates, observing specifically that the offshore tax gap seems low given that UK taxpayers held £849 billion in foreign accounts in 2019 and reportedly £570 billion in tax havens. HMRC told us that the wealthy and offshore tax gaps are particularly difficult to measure. It said it aims to be as comprehensive as possible and look across all tax types and behaviours in producing and refining estimates but there are inherent challenges.50 HMRC was clear that its estimate of the offshore tax gap is just a partial estimate and does not represent the totality of the offshore tax gap.51 It told us that it wants to expand the coverage and availability of the data to improve the quality of the estimate. Internally, HMRC has identified a much larger amount at risk from all forms of offshore non-compliance. We welcome the Permanent Secretary’s willingness to engage further with us on plans to improve transparency and the accuracy of the tax gap estimates.52 48 Qq 38, 119 49 C&AG’s Report, paras 2.2, 2.20 50 Qq 80-83, 110-111 51 Qq 113-114 52 Q 116 17