A chartered body has said that only 5% of the tax gap, the difference between the tax owed and the tax received, is attributable to individuals avoiding their tax obligations.

Of the £34bn that HMRC believes it is owed, only £1.7bn arises from tax avoidance, according to the Chartered Institute of Taxation (CIOT).

The tax gap is now at its lowest level ever, and around £14bn is explained by illegal behaviour, including the hidden economy (£3.5bn), criminal attacks (£3bn) and tax evasion (£5.2bn).

The CIOT’s John Cullinane said: “These figures suggest that tax evasion and other illegal activity are costing the exchequer more than eight times as much as tax avoidance.”

The CIOT said that it has long contended that HMRC should make greater efforts towards the investigation and prosecution of those individuals who attempt to avoid paying their fair share of tax.

The CIOT also wants HMRC to better help those individuals who genuinely make a mistake in their tax returns. The CIOT said: “The many changes to the tax system made and planned in the past 12 months should push HMRC into focusing on customer service.

“[That would be] a more direct way to help large numbers of fairly ordinary taxpayers who find themselves confronted by an ever more complex tax law and increasing compliance obligations. After all, nearly twice as much is lost in errors as in tax avoidance.”

However, when the figures were announced, the Treasury’s Mel Stride only chose to talk about those individuals who deliberately avoid tax.