An MPs committee has slammed HMRC’s customer service, claiming its “abysmal” track record is a threat to tax collection.
In a scathing report the Public Accounts Committee (PAC) said HMRC must rapidly improve its customer service, adding that it “beggars belief” that, having made “disappointing” progress on tax evasion and avoidance, the taxman seems “incapable of running a satisfactory service for people trying to repay their fair share”.
While recognising that HMRC had collected £517.7bn in 2014 /2015, £11.9bn more than the previous 12 months, the committee said it was concerned that no progress had been made on important issues. These were:
• HMRC still doesn’t report on how much cash it receives from compliance work, or on the scale of aggressive tax avoidance;
• The tax authority still avoids publishing information on the scale and nature of tax reliefs that would help parliamentary oversight;
• The standard of customer service is unacceptable;
• There are too few prosecutions for tax evasion.
There have been only 11 prosecutions for offshore tax evasion wince 2010, and only one individual from the ‘Falciani list’ of 3,600 potential tax evaders has been prosecuted.
The list names thousands of individuals whose Swiss bank account details were leaked by a former HSBC employee.
Despite all this, HMRC has increased total tax revenue in each of the past five years, in which period it has reduced its running costs from £3.4bn to £3.1bn.
The tax authority also estimates that tackling those who do not comply with their tax liabilities saved the exchequer £26.6bn in 2014/2015.
The creation of the Debt Market Integrator, a joint venture with TDX Group to optimise the collection of certain tax and other public sector debt, has so far played its part in boosting the overall revenue collection numbers.
According to HMRC’s annual report, the company has helped to collect £15.5m so far on behalf of HMRC and estimates it will recover a further £37.4m from payment plans set up with customers
However the public accounts committee’s focus was far more on tax evasion by wealthy individuals and large corporates.
Committee chair Meg Hillier said: “HMRC must do more to ensure all tax is paid. The public purse is missing out and taxpayers expect and deserve better.”
By Marcel LeGouais