HMRC's Progress In Improving Tax Compliance And Preventing Tax Avoidance
HC 458, Eighteenth Report of Session 2014-15 - Report, Together with the Formal Minutes Relating to the Report
- House of Commons - Committee of Public Accounts
- TSO (The Stationery Office)
The report 'HMRC's Progress In Improving Tax Compliance And Preventing Tax Avoidance (HC 458)' examines HM Revenue and Customs' (HMRC) performance in acting against tax avoidance measures.
The Committee finds that HMRC's action against tax avoiders is unacceptably slow. For example, the Liberty scheme, which allowed investors to avoid paying tax by creating tax losses that could be offset against income, began in 2005 and was closed down in 2009, but it has taken until 2014 to take this case to a tax tribunal.
Up to £10 million of the total £400 million tax at stake may not be recoverable because in 30 cases HMRC failed to start inquiries into personal tax returns within the 12 month statutory deadline.
HMRC should report on the progress it has achieved by using new powers granted by Parliament and show that it is using its existing powers with sufficient urgency. Recent changes to the UK tax regime have been challenged by international bodies like the OECD and European Commission as constituting 'harmful tax practices'. These changes make it easier for global companies to avoid paying tax in the jurisdictions where they make a profit.
HM Treasury and HMRC should provide details of progress in identifying and addressing the ways that international tax structures are exploited, and set out the actual costs and benefits of recent changes to the UK's tax regime.
A £1.9 billion error was made by HMRC when it established its baseline and set targets for its compliance work. This means HMRC has been overstating the extent to which its performance on compliance yield has improved and it inadvertently presented misleading information to Parliament.
This significant error in a key performance measure went undetected by HMRC's own system of governance and internal audit for three years.
|Format||Paperback||Published||18 Nov 2014|
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