However, the figures have indicated that this is the lowest amount ever reported by the tax authority. 

Nevertheless, HMRC has warned that as a result of the coronavirus pandemic and expected fraud of up to £4.2 billion in the government’s job retention scheme, the tax gap is likely to increase in the current financial year. 

Reasons for the tax gap include evasion, error and criminal activity. Tax evasion has been blamed for around £4.6bn of the lost revenue while £4.5bn has been lost to criminal attacks. An estimated £3.1bn has been attributed to error. 

About £5.5bn was the result of people and companies failing to take reasonable care when paying, such as carelessness or negligence in adequately recording transactions or in preparing their tax returns, The Times reports.

HMRC estimates that £1.7bn is yet to be paid by wealthy individuals - people with incomes above £200,000 a year or with assets worth more than £2 million.

However, the group of wealthy individuals, of whom there are about 700,000 in the UK, did pay £45bn in income tax and national insurance contributions as well as £40bn in other taxes such as corporation tax, VAT and capital gains.

The tax gap has been generally falling from the 7.5% that HMRC recorded in 2005-06.