Who does and doesn't pay taxes?

We use administrative tax data from audits of self‐assessment tax returns to understand what types individuals are most likely to be non‐compliant. Non‐compliance is common, with one‐third of taxpayers underpaying by some amount, although half of aggregate under‐reporting is done by just 2 per cent...

Full description

Saved in:
Bibliographic Details
Published in:Fiscal studies 2022-03, Vol.43 (1), p.5-22
Main Author: Advani, Arun
Format: Article
Language:English
Subjects:
Audits
Compliance
income tax
Inequality
self‐assessment
Tax avoidance
tax compliance
Tax evasion
Tax returns
Taxation
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:We use administrative tax data from audits of self‐assessment tax returns to understand what types individuals are most likely to be non‐compliant. Non‐compliance is common, with one‐third of taxpayers underpaying by some amount, although half of aggregate under‐reporting is done by just 2 per cent of taxpayers. Third‐party reporting reduces non‐compliance, while working in a cash‐prevalent industry increases it. However, compliance also varies significantly with individual characteristics: non‐compliance is higher for men and younger people. These results matter for measuring inequality, for understanding taxpayer behaviour, and for targeting audit resources.
ISSN:0143-5671
1475-5890
DOI:10.1111/1475-5890.12257