HMRC ‘loses nerve’ in pursuing big businesses – PAC

by Calum Fuller

More from this author

19 Dec 2013

  • Comments
Margaret Hodge

HM REVENUE & CUSTOMS is not sufficiently tenacious in its pursuit of taxes from large, multinational companies, the Public Accounts Committee has claimed.

Companies including Google, Amazon and Starbucks have been in the firing line for their use of offshore jurisdictions to drive down their UK tax liabilities.

The tax gap - the difference between tax due and tax collected - currently stands at around £35bn, approximately 7%, according to HMRC. Committee chair Margaret Hodge (pictured), however, claimed the figure excludes monies lost through aggressive tax avoidance. Upon the figure's release earlier this year, HMRC said the tax gap is compiled from 30 separate estimates for different taxes, and also breaks down reasons tax is not collected. These include tax evasion and avoidance, taxpayer error, the black market, criminal attacks and corporate insolvencies.

Following the committee's report on HMRC's annual accounts 2012/13, Hodge said: "HMRC holds back from using the full range of sanctions at its disposal. It pursues tax owed by the smaller businesses but seems to lose its nerve when it comes to mounting prosecutions against multinational corporations. It predicted that it would collect £3.12 billion unpaid tax from UK holders of Swiss bank accounts and this figure was built into budget estimates, but in 2013-14 it has so far secured just £440m. We were astonished that HMRC could not give any reasons for such a shortfall."

Responding the PAC, HMRC said:"HMRC strongly disputes the conclusions in the Public Accounts Committee report and challenges the Committee's selective and misleading use of figures.

"HMRC seeks to collect the tax that is due from all taxpayers, so that everyone pays their fair share in accordance with the tax laws passed by Parliament. We have secured more than £50 billion of additional tax from our compliance work since 2010, including £23 billion from large businesses.

"We have carried out 2,345 prosecutions for tax evasion in the last three years, including of high-profile accountants and lawyers, have halved the number of disclosed tax avoidance schemes and have protected more than £2.4 billion from marketed tax avoidance schemes this year alone."

 

Visitor comments

blog comments powered by Disqus
display:none

Add your comment

We won't publish your address


By submitting a comment you agree to abide by our Terms & Conditions

Your comment will be moderated before publication

Submit
  • Send

Newsletters

Get the latest financial news sent directly to your inbox

  • Best Practice
  • Business
  • Daily Newsletter
  • Essentials

Careers

Search for jobs
Click to search our database of all the latest accountancy roles

Create a profile
Click to set up your profile and let the best recruiters find you

Jobs by email
Sign up to receive regular updates with the latest roles suitable for you

Briefings

budget-management

Why budgeting fails: One management system is not enough

If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.

cchcover

iXBRL: Taking stock. Looking forward

In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.