MPs say HMRC ‘unacceptably slow’ on tax avoidance

Action taken against tax avoidance by HM Revenue & Customs continues to be “unacceptably slow” and is putting tax revenues at risk, a group of MPs has warned.

In a 16-page report, HMRC’s Progress in Improving Tax Compliance and Preventing Tax Avoidance, Eighteenth Report of Session 2014/15, the House of Commons public accounts committee called on the organisation to provide details of its progress.

The committee claimed that while HMRC had “reported exceeding its target” for additional revenue brought in by cracking down on those not complying with tax liabilities in 2013/14, it had “overstated” the improvement in its performance for the two previous years because of a calculation error.

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The committee called on HMRC to be more transparent about how it estimates this additional revenue, known as compliance yield, and to use a “comparable measure of compliance yield over time”.

It also called on HMRC to demonstrate that it was using its existing powers with sufficient urgency and to give the committee details on progress in “identifying and addressing the ways that international tax structures are exploited”.

Adviser view

Tom Dean, chartered financial planner for London-based Plutus Wealth Management, said: “It is very important to clamp down on tax avoidance for moral reasons.

“Also we are encouraging people to save and to make pension contributions, but this does not work if the system is not functioning properly.”