Recommendation 19

HMRC said that it estimates the tax gap in accordance with best practice, and pointed to a review by the Office for Statistics Regulation in 2019 as evidence of rigorous external scrutiny. It said it was always keen to improve its tax gap estimates if it can.65 HMRC said that the tax gap can only be properly measured two or three years after the year in question, and that it is best viewed over a number of years rather than a point in time.66 For assessing performance in the latest year, HMRC instead uses compliance yield to assess how effectively it is managing the tax gap in the short term.67