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Wednesday 04 November 2015 1:51 pm

Public Accounts Committee: Taxpayers still being let down by HMRC, with low levels of prosecutions for tax evasion

By: Hayley Kirton

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HM Revenue & Customs (HMRC) is still failing UK taxpayers, the Public Accounts Committee (PAC) has argued in a report released this morning.

Although PAC’s Sixth Report of 2015-16, which examines how HMRC performed during 2014-15, praises the UK’s tax authority for increasing taxes collected while cutting running costs over the last five years, it also expresses disappointment about the lack of progress being made on issues previously raised by PAC.

The report also highlights the committee's concerns about how few individuals have been prosecuted for tax evasion, saying the low levels of prosecution effectively mean there is nothing to deter people from breaking the law in this way.

“HMRC must do more to ensure all due tax is paid,” said Meg Hillier MP, chair of the PAC. “The public purse is missing out and taxpayers expect and deserve better.”

She continued: “We are deeply disappointed at the low number of prosecutions by HMRC for tax evasion. We believe it is important for HMRC to send a clear message to those who seek to evade tax that the penalties will be severe and public.”

Criticisms in the report include the number of prosecutions for offshore tax evasion, which is described as “woefully inadequate”, and the quality of HMRC’s customer service, which the report describes as so bad that it could be having “an adverse impact on the collection of tax revenues”.

Hillier remarked: “It beggars belief that, having made disappointing progress on tax evasion and avoidance, the taxman also seems incapable of running a satisfactory service for people trying to pay their fair share.”

PAC’s recommendations in the report include reporting the value of all tax avoidance schemes, defining the different types of tax relief available and reporting the additional amount of revenue generated from compliance work in simpler terms.

A 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 and further reducing the UK's ‘tax gap’ – the difference between what is due and what is collected – to ensure it remains one of the lowest in the world."

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