MPs slam HMRC for not doing more to tackle tax fraud

MPs slam HMRC for not doing more to tackle tax fraud

MPs have slated HM Revenue & Custom’s attempts to fight tax fraud, saying the number of criminal prosecutions for offshore tax evasion is still “woefully inadequate”.

A report from the Committee of Public Accounts published on 15 April concluded that not enough was being done by HMRC to tackle tax fraud.

It stated that the tax office had made “only limited progress” in reducing the level of losses through tax evasion, which has been “relatively constant” over the last five years.

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The committee described the department’s reporting of its own performance as “too confusing”, and called on HMRC to address the perception it does not tackle tax fraud by the wealthy, which results in losses of some £16bn a year, almost half of the £34bn gap in how much it should be collecting, according to MPs.

Chairman of the committee Meg Hillier MP, said: “Honest taxpayers rightly expect a tax system that works fairly for all, and any perception that this is not the case undermines the public’s trust in that system.

Her comments follow the publication of the so-called Panama Papers’ which covered nearly 40 years, from 1977 through the end of 2015, and were allegedly leaked from Panama-based global law firm Mossack Fonseca.

The 11.5m documents indicate that banks, law firms, offshore players and even politicians often failed to follow legal requirements, while major banks are big drivers behind the creation of hard-to-trace companies in the British Virgin Islands, Panama and other offshore havens.

Adviser view:

Martin Dodd, owner adviser at Wolverhampton-based Midlands Investment Agency, branded the move “just a deflection from the point”.

He added: “My view is the majority of affluent people pay a great deal of tax. Corporates such as Google and Facebook are where the issues exist, not individuals,” he said.