The Tax Gap

A blog dedicated to comments on 'Mind the Tax Gap', a report published by The Tax Gap Limited in January 2006 which shows that there is a Tax Gap of at least £9.2 billion of unpaid UK corporation tax each year. This is approximately 28% of actual corprpation tax receipts in 2004.

Monday, January 02, 2006

Mind the Tax Gap.

This is a blog dedicated to comment on 'Mind the Tax Gap', a report published by The Tax Gap Limited in January 2006. The report shows that:

  1. There is a Tax Gap with regard to corporation tax in the UK;
  2. That Gap is at least £9.2 billion per annum as a minimum;
  3. This is approximately 27% of the corporation tax paid in 2004;
  4. The Tax Gap is increasing steadily in percentage terms, a trend that is not explained by changes in tax rates around the world;
  5. There is no indication that the aggregate sum of £3 billion of deferred tax liability provided annually by the companies surveyed for the report will ever be paid;
  6. £36 billion of unpaid deferred tax now sits on the balance sheets of the top 50 companies in the UK, a sum that is increasing steadily;
  7. Current accounting disclosure does not provide adequate explanation for the Tax Gap or the deferred tax liabilities of these companies and major overhaul to that disclosure is required if users of accounts are to fully understand the tax risks that the companies they invest in take.



1 Comments:

At 6:54 pm, Blogger Dennis Howlett said...

This is important work which requires discussion at a number of levels.

Thanks Richard for giving your time to discuss some of the issues.

see: http://www.accmanpro.com/?p=401 for a quick summary of our conversation or: http://cityslickrs.libsyn.com/media/cityslickrs/taxgap2_copy_1.mp3 for the 48 minute show.

 

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