Corporate report

Tax by different customer groups – 2022 to 2023

Published 17 July 2023

Every year, we collect revenues from millions of individuals and from businesses of all sizes. To help us do this, we segment our customers into groups so we can identify their needs and risks more accurately and tailor our responses accordingly. The information below show key performance data for our customer groups during 2022 to 2023.

There are some differences between the way we segment receipts between customer groups and how theoretical liabilities are segmented when calculating tax gaps. For example, as employers operate PAYE schemes, we evaluate compliance in PAYE within the tax gaps for small, mid-sized and large business customer groups.

Individual customers: population 34 million (Income Tax payers)

Individuals are by far our largest customer group and many claim tax credits and other entitlements from us, as well as paying taxes. In 2022 to 2023 they were defined as having incomes below £200,000 and assets below £2 million in each of the last 3 years.

• £315 billion Estimated PAYE and National Insurance Contributions (NIC) receipts collected (to nearest £5 billion)
• £20 billion Estimated receipts – other taxes, such as Corporation Tax, VAT, excise duties, Capital Gains Tax (to nearest £5 billion)
• £3.2 billion Estimated compliance yield generated from our activities (to nearest £0.1 billion)
• £430 million Estimated spend on compliance activities (to nearest £10 million)
• £2.1 billion Estimated tax gap estimate for 2021 to 2022 (to nearest £0.1billion)

Wealthy individuals: population 850,000

Wealthy individuals often have complex tax affairs covering multiple different taxes. In 2022 to 2023 they were defined as having incomes of £200,000 or more, or assets equal to or above £2 million in any of the last 3 years.

• £65 billion Estimated PAYE and NIC receipts collected (to nearest £5 billion)

• £50 billion Estimated receipts – other taxes, including Corporation Tax, VAT, excise duties, Capital Gains Tax (to nearest £5 billion)

• £4.0 billion Estimated compliance yield generated from our activities (to nearest £0.1 billion)
• £320 million Estimated spend on compliance activities (to nearest £10 million)
• £1.7 billion Estimated tax gap estimate for 2021 to 2022 (to nearest £0.1billion)

Small businesses: population 5.2 million

Small businesses represent approximately 95% of businesses in UK. In 2022 to 2023 they were defined as having turnover below £10 million and typically fewer than 20 employees.

• £90 billion Estimated PAYE and NIC receipts collected (to nearest £5 billion)
• £105 billion Estimated receipts – other taxes, including Corporation Tax, VAT, excise duties, Capital Gains Tax (to nearest £5 billion)
• £6.5 billion Estimated compliance yield generated from our activities (to nearest £0.1 billion)
• £650 million Estimated spend on compliance activities (to nearest £10 million)
• £20.2 billion Estimated tax gap estimate for 2021 to 2022 (to nearest £0.1billion)

Mid-sized businesses, charities and public bodies: population 300,000 (Corporation Tax Registered Entities)

Mid-sized businesses make up approximately 5% of UK businesses, but some are growing rapidly, making their tax affairs increasingly complex. In 2022 to 2023 they were defined as having turnover between £10 million and £200 million or typically 20 or more employees.

• £150 billion Estimated PAYE and NIC receipts collected (to nearest £5 billion)

• £50 billion Estimated receipts – other taxes, including Corporation Tax, VAT, excise duties, Capital Gains Tax (to nearest £5 billion)

• £4.1 billion Estimated compliance yield generated from our activities (to nearest £0.1 billion)
• £280 million Estimated spend on compliance activities (to nearest £10 million)
• £3.8 billion Estimated tax gap estimate for 2021 to 2022 (to nearest £0.1billion)

Large businesses: population 2,000

Large and complex businesses play a pivotal role in the UK economy. In 2022 to 2023, they were broadly defined as having turnover exceeding £200 million or £2 billion in assets, but we look at other factors such as complexity, level of risk and global mobility.

• £135 billion Estimated PAYE and NIC receipts collected (to nearest £5 billion)
• £185 billion Estimated receipts – other taxes, including Corporation Tax, VAT, excise duties, Capital Gains Tax (to nearest £5 billion)
• £10.2 billion Estimated compliance yield generated from our activities (to nearest £0.1 billion)
• £280 million Estimated spend on compliance activities (to nearest £10 million)
• £3.9 billion Estimated tax gap estimate for 2021 to 2022 (to nearest £0.1billion)

Notes

1. Estimated PAYE and NICs receipts are collected from small, mid-sized and large businesses but paid by individual and wealthy customers. Total PAYE receipts are therefore included twice in these figures to show how they are attributed to both business and customer groups.

2. Estimated receipts from other taxes includes Self Assessment tax.

3. PAYE receipts are included in the total receipts for individual and wealthy customer groups, whereas the PAYE tax gap is reported as part of the tax gaps for small, mid-sized and large business customer groups.

4. Receipts align with the June 2023 cash receipts publication found in the link below, and therefore are provisional until they are aligned to the Trust Statement: https://www.gov.uk/government/statistics/hmrc-tax-and-nics-receipts-for-the-uk.

5. Some compliance yield and activities are directed towards organised crime, which is not included in this table.

6. Changes to the off-payroll working rules were introduced to make sure that individuals working like employees but through their own intermediary pay broadly the same income tax and national insurance as those who are directly employed. This meant the employment status for some individuals changed, from working through their own intermediary, usually a limited company (often known as a personal service company), to Pay As You Earn. For more information please see: Understanding off-payroll working (IR35) - GOV.UK (www.gov.uk). In 2021 to 2022 £1.0 billion of yield from this measure was attributed into the ‘small’ customer segment. The 2022 to 2023 yield of £1.4 billion has been reclassified in line with the measure to attribute it more accurately to ‘individuals’ (to reflect income tax and employee NICs) and ‘large’ (to reflect employer NICs). This has not affected the total yield collected from the measure.