Closing the Gap: How IVIX Can Help HMRC Reduce the £46.8 Billion Tax Shortfall

On 19 June 2025, HMRC announced that the UK tax gap for the 2023–24 fiscal year stood at 5.3%, or £46.8 billion—a figure that, despite representing a relatively stable percentage, still reflects a significant loss in public revenue. The government has committed to raising an additional £7.5 billion by tackling this shortfall, with £1.7 billion allocated to bolstering HMRC’s compliance and debt management workforce.

As HMRC takes steps to close the gap, IVIX offers a technology-driven strategy to amplify impact, target high-risk behaviors, and accelerate results—particularly in the small business segment, which accounts for 60% of the gap.

Spotlight on the Problem: Where the Gap Is Largest

HMRC’s latest data reveals several key insights:

• Small businesses are responsible for 60% of the overall tax gap—up from 48% five years ago.
• Corporation Tax now makes up 40% of the tax gap, with small business underreporting playing a major role.
• The top behavioral drivers include failure to take reasonable care (31%), error (15%), and evasion (14%).
• MTD (Making Tax Digital) is expected to generate £5.95 billion in new revenue by 2030, but additional support is required to close compliance gaps faster.

How IVIX Can Help Close the Gap—Faster and Smarter

1. Targeting Hidden Revenue with OSINT. IVIX uses Open-Source Intelligence (OSINT) to detect undeclared business activity across e-commerce platforms, social media, local service directories, and digital advertisements. This approach:

• Uncovers entities flying under HMRC’s radar;
• Matches online footprints with tax filings to flag non-compliance;
• Surfaces actionable leads tied to sectors with high misreporting potential;
• Validates that cases meet audit thresholds, streamlining case deployment.

2. Prioritizing Cases with Precision. IVIX uses behavior-based AI to score risks dynamically, helping HMRC to:

• Focus on high-value targets within the small business segment;
• Detect patterns linked to systemic evasion or fraud;
• Optimize the impact of newly recruited compliance officers by guiding them to the most productive cases.

3. Plugging Gaps in High-Risk Sectors. From short-term rentals and influencer income to cryptocurrency gains and e-commerce platforms, IVIX enables HMRC to:

• Rapidly identify income streams commonly underreported;
• Link fragmented data across platforms and geographies;
• Support MTD goals by offering real-time digital visibility into taxpayer activity.

Supporting Institutional Learning and Integrity

The TCIM recognizes that technical knowledge and organizational integrity are essential to sustainable enforcement. IVIX contributes on both fronts. IVIX partners with tax enforcement agencies to train investigators on advanced, high-risk domains such as:

• Cryptocurrency capital gains
• E‑commerce platform TAX and VAT collection issues
• Short‑term rental activity capital gains
• Social‑media influencer income
• FATCA/CRS cross‑border data analysis

These areas represent fast-growing challenges for many jurisdictions, and our goal is to ensure officers are prepared to act decisively, using both OSINT and structured intelligence.

IVIX: A Proven Engine for ROI

The UK government has already invested heavily in growing HMRC’s compliance force. But scaling manual enforcement can only go so far. IVIX boosts the return on that investment by:

• Delivering automated case discovery at scale;
• Reducing cost per enforcement action through prioritization;
• Increasing revenue recovery through early detection and evidence-backed referrals.

As jurisdictions like the UK push for smarter, tech-enabled enforcement, IVIX offers an immediate multiplier on public investment in tax integrity.

A Partnership That Delivers

HMRC has made clear its commitment to modernization through MTD and expanded staff resources. IVIX is the perfect complement—delivering intelligence, automation, and digital evidence pipelines that empower those staff to act efficiently and effectively. Together, we can:

• Shrink the £46.8 billion tax gap;
• Accelerate toward HMRC’s £7.5 billion recovery goal;
• Build a tax system where everyone pays their fair share.

We applaud HMRC’s leadership and are proud to support the UK’s mission to close the tax gap through innovation, insight, and integrity.

Learn more at https://www.ivix.ai/

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