MPs HAVE SLAMMED HM Revenue & Customs for its “unacceptably slow” performance in getting tough on tax avoidance and failure to tackle companies exploiting international tax structures to minimise UK tax liabilities.
In a hard-hitting report, Margaret Hodge, chair of the powerful public accounts committee, dubbed HMRC’s action against tax avoiders as “unacceptably slow, putting tax revenues at risk” and that it did “not do enough to tackle companies which exploit international tax structures to minimise UK tax liabilities”.
And she rapped the taxman over the time it took to confront the notorious Liberty tax avoidance scheme saying it had jeopardised up to £10m of the total £400m tax at stake from the 2,000 scheme users, because in 30 cases HMRC had “failed to start inquiries into personal tax returns within the 12 month statutory deadline”.
She also criticised HMRC’s slow progress in acting on information from the Falciani list, which identified 3,600 UK individuals potentially avoiding tax using secret Swiss bank accounts.
The committee also expressed its “astonishment” that a £1.9bn performance measurement error “went undetected by HMRC’s own system of governance and internal audit for three years.”
The taxman said that despite such an epic error it had exceeded its targets every year since 2010.
Hodge urged HMRC to do more to tackle companies which exploit international tax structures to minimise UK tax liabilities: “Recent changes to the UK tax regime, such as those for controlled foreign companies, have been challenged by international bodies like the OECD and European Commission as constituting ‘harmful tax practices.
“These changes, including the introduction of the patent box relief, make it easier for global companies to avoid paying tax in the jurisdictions where they make a profit.
“Some international tax experts believe that the UK’s tests for companies to gain tax residency are less rigorous than in other EU jurisdictions. Research into seven companies who have recently relocated to the UK for tax purposes showed very little inward investment was generated or jobs created in the UK in return for the tax benefits the companies receive.”
She tasked the Treasury and HMRC with providing PAC with more details of its progress in identifying and addressing ways international tax structures are exploited, and set out the actual costs and benefits of recent changes to the UK’s tax regime.
Crowe Clark Whitehill , the top 20 accountancy firm, has announced the promotion of Chris Mould to partner
HMRC is continuing to ramp up the number of raids on premises it carries out as part of criminal investigations, searching 761 properties in the last year
The latest opinions from Accountancy Age on Making Tax Digital, and outline plans to evolve the UK's corporate governance regime
Five million taxpayers are ow using digital personal tax accounts (PTA) as part of the making tax digital strategy, HMRC said