Select committee to evaluate effectiveness of tax system

THE TREASURY SELECT COMMITTEE will hear evidence in the new year on the competitiveness of the UK’s tax system and its vulnerability to tax avoidance, it has emerged.

The committee, led by Tory MP Andrew Tyrie, will examine issues around corporate tax avoidance, and is likely to scrutinise wider issues of tax policy, The Financial Times reports. 

This follows on from a Public Accounts Committee enquiry into corporate tax avoidance schemes and HMRC’s performance in the last year.

Initially, the Committee was due to analyse the National Audit Office’s reports – however, it broadened the scope following revelations of avoidance schemes which angered members. 

However, some in the Treasury Select Committee were irritated over the Public Accounts Committee enquiry and complained its chairwoman, Labour MP Margaret Hodge (pictured), had overstepped the remit of analysing the National Audit Office’s reports.

The remit of this latest enquiry will include the entire “purpose of tax policy”.

The Public Accounts Committee report, which was published on 3 December, was highly critical of HMRC, accusing its top executives of a “pervasive acceptance of the status quo” and “not taking sufficiently aggressive action to assess and collect the appropriate amount of corporation tax from these multinationals”.

Tory MP Tyrie has previously criticised the tax system for being “riddled with anomalies” and for being “incoherent”.

The Treasury Select Committee is expected to call for evidence in the coming days.

Related reading