HMRC has made 'little or no progress' on tax avoidance transparency, MPs warn

The Public Accounts Committee wants the tax authority to report more information

HMRC's building in Whitehall
HMRC's building in Whitehall

The UK’s tax authority has made “little or no progress” on revealing the scale of aggressive tax avoidance happening in Britain, an influential committee of MPs has warned.

In a report released on Wednesday the Public Accounts Committee (PAC) said the tax authority had ignored previous recommendations to provide specific information about the practice’s scale and nature.

The PAC praised HMRC’s progress in increasing tax collected and reducing its running costs but said other areas were a matter of concern.

“We are concerned that [HMRC] has made little or no progress on a number of important issues that this Committee has raised before,” the committee’s report said.

“Despite this Committee’s previous recommendations, HMRC still does not report on how much cash was received as a result of its compliance work or on the scale of aggressive tax avoidance which exploits loopholes in the law.

“HMRC also continues to avoid publishing information on the scale and nature of tax reliefs that would assist Parliamentary oversight of this area of the tax system.”

The Public Accounts Committee scrutinises how the Government and its agencies handle money.

In March this year it was reported that tax avoidance investigations by a new HMRC team targeting the financial sector was up by a quarter – going from four per month to six per month.

However, the glimpse into the High Net Worth Unit’s activities was provided by a firm that insures businesses against the cost of HMRC investigations, PFP.

The civil service union PCS, which organises some HMRC workers, said more investment was needed in cracking down on tax avoidance.

“It has been abundantly clear for years that the department has cut too many staff and that services are suffering,” its general secretary Mark Serwotka said.

“The department needs major investment backed by a real political commitment to tackle tax evasion and avoidance as an alternative to more damaging spending cuts.”

The report released on Wednesday was also critical of HMRC’s taxpayer-facing customer service, describing it as “abysmal”.

The Independent revealed last week that the UK was funding blacklisted tax havens to the tune of £45m through its international aid budget.

An HMRC spokesperson said: “We are disappointed that the Public Accounts Committee has overlooked HMRC's record results, which include collecting a record £517bn in tax revenues.”

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