15 Apr 2016

MPs criticise HMRC on tackling tax frauds

MPs have criticised HM Revenue & Custom’s attempts to fight tax fraud, describing the number of criminal prosecutions for offshore tax evasion as still ‘woefully inadequate’.

A report was published today (15 April) from the Committee of Public Accounts concluding that not enough is being done by HMRC to tackle tax fraud.

The report stated that, over the last five years, the tax office has made ‘only limited progress’ in reducing the level of losses through crime which has been ‘relatively constant’.

The MPS ruled that HMRC has not set out a clear strategy for dealing with tax fraud and does not know what meeting its target of 1,000 additional prosecutions this year has achieved.

The Committee of Public Accounts stated that the departments reporting of its own performance is ‘too confusing’ and requested  HMRC address the perception that it does not tackle tax fraud by the wealthy.

Recommendations in the report included HMRC to clearly set out in its annual reports the relationship between its compliance yields and changes in ‘the tax gap’.  It states that they should also publish this information ‘in a way that is accessible for everyone to understand’.

According to MPs, tax fraud results in losses of some £16bn a year. This is almost half of the £34bn gap of how much it should be collecting.

The committee has called on HMRC to set out its strategy to tackle tax fraud by November this year, as well as to take steps to ‘counter the belief that people are getting away with tax evasion’.

They have told HMRC ‘to increase the number of investigations and prosecutions, including wealthy tax evaders, and publicise this work to deter others from evading tax to send out a message that those who try will not get away with it’.

By Samantha Atherton