REFNATION
EconomyEnded 11 Jul

Should HMRC increase enforcement to close the £17.3bn small company corporation tax gap?

Yes 60%No 40%52 votes cast

Small UK companies fail to pay £17.3 billion in corporation tax annually, almost half of the £38.7 billion they owe. This forms the largest and fastest-growing part of the overall £59.2 billion UK tax gap for 2024-25. HMRC has reduced active enforcement while Companies House allows abusive firms to dissolve without consequence.

Jump to opinions· 2

Behind the comfortable margin for HMRC to go harder on the £17.3bn small company tax gap sits an unusually lopsided coalition. The 16-24s backed enforcement almost to a person, and the over-65s weren't far behind, but the 25-34 group — the very cohort most likely to be founding or working in small firms themselves — tipped narrowly the other way, and the 55-64s split exactly evenly.

The gender divide was just as pointed: men voted for tougher enforcement by roughly two to one, while women leaned against it, a gap wide enough to suggest this wasn't simply a question of tax morality but of who feels exposed to HMRC's attention. Read together, the age and gender patterns hint at a fault line less about principle than proximity — those closest to running a small business, or most likely to be one, were warier of handing HMRC more teeth.

The vote lands on ground Britain knows well from the "tax gap" debates of the last decade — the tension between chasing large-scale avoidance and squeezing ordinary small traders, and the recurring complaint that Companies House lets companies dissolve their way out of liability. Enforcement wins the argument in principle here, but the coalition behind it looks thinner than the headline suggests.

A 20-point win that masks a house divided along exactly the lines you'd expect: those with least skin in the game were keenest for HMRC to bare its teeth.

If everyone paid would it then bring down the tax rate!

YES case · Glasses · 0 respects

The problem is companies closing without ever filing. HMRC are guessing at the CT debt, as they have never seen records, and the companies are scams, so likely no real records exist. Unlikely to result in net income.

NO case · osiris · 0 respects

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osiris· 653
The Contender
Voted noRight lean

The problem is companies closing without ever filing. HMRC are guessing at the CT debt, as they have never seen records, and the companies are scams, so likely no real records exist. Unlikely to result in net income.

Glasses· 556
The Motorway Marketeer
Voted yesRight lean

If everyone paid would it then bring down the tax rate!