HM Revenue & Customs is failing to use the powers it already has despite seeking new ones, according to a City law firm.
Fewer than five Conduct Notices were issued to promoters of tax avoidance schemes since the power was introduced in 2014.
Conduct Notices allow HMRC to impose strict conditions on a promoter, with fines of up to £1m payable if they are not complied with.
Adam Craggs, partner and head of RPC’s tax disputes team, said: “That HMRC has a large number of draconian powers which are rarely used suggests that it never actually needed them in the first place.
“Before granting HMRC yet further powers, Parliament should consider very carefully whether such powers are actually needed and ask HMRC to explain why some of the powers it has been granted in recent years have been under-utilised.
“Use of a Conduct Notice is a very serious matter for the recipient, as it can lead to the imposition of substantial penalties. The fact that HMRC has used them on fewer than five occasions in the last two years suggests that there was no real need for such powers in the first place.”
Mr Craggs said HMRC’s “powerful arsenal” also included the General Anti-Abuse Rule which came into effect in 2013.
He said: “It’s also understood that no cases have been brought under the GAAR.
“The huge range of swingeing powers HMRC has been given in recent years may have helped its image, but to date they have been little used as an enforcement tool, and some may question whether public time and resources could have been better spent.”
HMRC is set to gain further powers to sanction tax professionals, including accountants, lawyers and financial advisers.
A consultation published in August proposed penalties of up to 100 per cent of tax avoided for individuals and companies who enable tax avoidance arrangements.
A HMRC spokesman said: "It is still early days for cases tackled by the GAAR as it only applies to arrangements entered into after 17 July 2013. There are a number of cases which are under consideration for application of the GAAR."