Businesses and individuals paid £35 billion less in tax than they should have, with more than £9bn lost through evasion and avoidance, according to the latest figures.
Official estimates indicated £11.4bn of VAT, £15.3bn of income tax, £4.7bn in corporation tax and £2.5bn excise duties was not collected in 2011/12.
The HM Revenue and Customs' (HMRC) figures suggest £5.1bn was lost to the Exchequer as a result of evasion, £4.7bn as the result of criminal activity including fraud and smuggling and £4bn through avoidance schemes.
The £35bn estimated uncollected tax is an increase of £1bn from the figure in 2010/11, although the percentage tax gap decreased from 7.1% to 7%.
Exchequer Secretary David Gauke said HMRC would continue to "fiercely" challenge tax dodgers.
He said: "These figures show the tax gap is continuing to fall. The vast majority of businesses and individuals pay the taxes they owe.
"But where they don't, it is for HMRC to challenge non-compliance fiercely, protecting money that would otherwise be lost.
"Since 2010, the Government has invested nearly £1bn in additional compliance initiatives over the Spending Review period.
"HMRC is on track to secure a further £44bn in tax revenues over the next two years."
But Labour's Shadow Exchequer Secretary, Shabana Mahmood, said: "These figures show the Government is failing to tackle tax avoidance."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article