Improve HMRC tax collection
Reform UK · what the evidence says
An independent, source-checked look at Reform UK’s policy “Improve HMRC tax collection” — what it would actually do across the things that affect your life. Every claim below quotes the source behind it. How this works.
Public finances & the next generation — Genuinely contested
n/a · low confidence
The policy aims to collect tens of billions more in unpaid tax, which — if delivered — would improve public finances without new borrowing. But no committed budget, staffing level, or enforcement mechanism is specified, so whether any revenues actually materialise is genuinely unknown.
The evidence
- The policy commits to improving HMRC's competence to collect tens of billions in unpaid taxes, attributing the shortfall to understaffing and bad management. — reformparty.uk (manifesto) — “Reform UK will improve HMRC's competence to collect tens of billions in unpaid taxes, which they attribute to understaffing and bad management.”
- HMRC's official 2023-24 tax gap stands at £46.8 billion, or 5.3% of theoretical tax liabilities. — gov.uk (media) — “HMRC's latest estimates for the 2023-24 tax year place the total "tax gap" – the difference between the amount of tax that should theoretically be collected and what is actually paid – at £46.8 billion, representing 5.3%…”
- The tax gap in absolute terms has grown from £32.5 billion in 2005-06 to £46.8 billion in 2023-24, even as the proportion has fallen. — gov.uk (media) — “its absolute value has increased from £32.5 billion to £46.8 billion over the same period.”
- Parliamentary evidence indicates that investment in HMRC staffing yields at least £10 of tax collected per £1 invested. — publications.parliament.uk (government) — “a minimum return of £10 for every £1 invested in HMRC staffing.”
- HMRC has faced large budget cuts over the past decade, contributing to staff and service problems consistent with the policy's diagnosis. — taxwatchuk.org (media) — “HMRC has faced "enormous cuts to its budget over the last ten years."”
- A government commitment at the 2025 budget to increase HMRC investment is forecast to raise £10 billion by 2029-30, illustrating the scale of credible gains when investment is actually committed. — taxjustice.uk (media) — “A government commitment to further increase investment in HMRC at the 2025 budget is forecast to raise £10 billion by 2029-30.”
Biggest unknown: Whether any concrete, funded investment in HMRC staffing and enforcement is actually committed — without a specified budget or mechanism, the claimed gains remain aspirational.
Our reading: The policy correctly identifies a real and large tax gap (£46.8bn in 2023-24) and a credible mechanism: parliamentary evidence confirms HMRC investment yields at least £10 per £1 spent, and the government's own 2025 budget commitment to HMRC investment is forecast to raise £10bn by 2029-30. The historical context of large budget cuts to HMRC is consistent with the policy's diagnosis. The case that better-resourced enforcement can improve the debt path is therefore evidenced in principle. However, the policy text contains no committed instrument — no budget, no staffing target, no statutory duty, and no quantified milestone. Under the soft-verb/no-deliverable rule, 'will improve competence' without a funded plan cannot earn a direction of 'improves'; the mechanism is plausible but there is no cited evidence it fires at scale under this policy. The decisive parameter — whether real, funded investment is actually committed — is unresolved in the policy text. This is a genuine uncertainty rather than manufactured balance: the upside (material fiscal improvement) and the null outcome (aspirational words, no delivery) are both plausible, and no cited evidence resolves which will occur. The verdict is therefore too-uncertain.
Inequality & fair shares — Genuinely contested
n/a · low confidence
Collecting unpaid taxes could narrow inequality if it falls mainly on wealthy evaders, but nearly 60% of the tax gap is currently attributed to small businesses and almost half to ordinary taxpayer error — so the distributional effect depends heavily on which parts of the gap HMRC actually targets, and the policy gives no specifics. Without knowing who bears the additional collection, the direction on inequality cannot be resolved.
The evidence
- The policy aims to improve HMRC competence to collect tens of billions in unpaid taxes, attributed to understaffing and bad management. — reformparty.uk (manifesto) — “Reform UK will improve HMRC's competence to collect tens of billions in unpaid taxes, which they attribute to understaffing and bad management.”
- The total tax gap in 2023-24 was £46.8 billion, representing 5.3% of total theoretical tax liabilities. — gov.uk (media) — “HMRC's latest estimates for the 2023-24 tax year place the total "tax gap" – the difference between the amount of tax that should theoretically be collected and what is actually paid – at £46.8 billion, representing 5.3%…”
- Almost half of the tax gap — £21.7 billion — is attributed to taxpayer error or failure to take reasonable care, not deliberate evasion. — tax.org.uk (media) — “Almost half of the tax gap, £21.7 billion in 2023-24, is attributed to taxpayer error or a failure to take reasonable care, with £14.6 billion due to the latter and £7.1 billion due to error.”
- Small businesses account for 60% (£28 billion) of the tax gap, up from 48% in 2019-20, making them the dominant source. — gov.uk (media) — “The share of the tax gap attributed to small businesses has significantly increased, rising from 48% in 2019-20 to 60% (£28.0 billion) in 2023-24.”
- HMRC compliance work with wealthy individuals raised £5.2 billion in 2023-24, suggesting some progressive enforcement already occurs. — publications.parliament.uk (government) — “HMRC's compliance work with wealthy individuals has already seen a substantial increase, collecting £5.2 billion in 2023-24, up from £2.2 billion in 2019-20.”
- Some organisations argue the official tax gap understates sophisticated avoidance by multinationals and offshore evasion by wealthy individuals. — taxwatchuk.org (media) — “They argue that the official figures do not fully account for sophisticated tax avoidance strategies like profit shifting by multinational corporations and offshore tax evasion by wealthy individuals.”
Biggest unknown: Whether additional HMRC enforcement effort would fall predominantly on wealthy individuals and large corporations (progressive, narrows gap) or on small businesses and error-prone ordinary taxpayers (regressive or neutral on inequality).
Our reading: Improved HMRC enforcement could improve O14 if it disproportionately recovers taxes owed by wealthy individuals and large corporations — this would be straightforwardly progressive, narrowing the gap. There is evidence that HMRC compliance work with wealthy individuals has grown and is lucrative (E8), and that some advocacy sources believe the wealthy/corporate share of evasion is understated (E22). However, the current measured tax gap is dominated by small businesses at 60% (E19) and by ordinary taxpayer error at nearly half of the total (E17). If improved HMRC competence simply collects more across the board, a large share of the additional revenue would come from small business owners and error-prone ordinary taxpayers — groups who are not the wealthiest, and whose additional tax burden could be regressive or neutral relative to O14. The policy text names no targeting strategy, no instrument, and no allocation of effort between compliance segments. Without knowing which part of the gap enforcement is aimed at, it is impossible to determine whether the distributional effect narrows or widens the gap. The crux — who pays — is unresolved by the evidence provided, making a direction verdict on O14 genuinely too uncertain.