MPs think HMRC isn't doing enough to crack down on tax fraud...
Taxpayers are missing out on £16 billion a year as a result of tax evasion and criminal activity, according to the Public Accounts Committee (PAC), which has called on HMRC to do more to tackle the problem.
MPs from the group highlighted the need to increase the number of investigations and prosecute more wealthy tax evaders. HMRC is said to investigate around 35 wealthy individuals for tax evasion a year, but it told MPs it didn’t know how many had been successfully prosecuted.
The level of tax fraud losses has remained fairly constant over the last five years at around 3% of tax owed to the Treasury, and the taxman has pointed out that it collects 93p for every pound due - giving the UK one of the smallest tax gaps in the world.
Taking action
The PAC has urged HMRC to clearly set out changes in the tax gap in its annual reports, publishing the information in a way that’s easy for everybody to understand. HMRC should also set out a strategy to tackle fraud by November 2016 and dispel the belief that people are getting away with tax evasion, it said.
Furthermore, its members want clarity on the ‘growing risk’ of VAT fraud by online traders and the effectiveness of measures intended to tackle this type of fraud.
Meg Hillier MP, chair of the PAC, said:
"The scale of tax fraud, both in cash terms and as a proportion of uncollected tax, demonstrates just how vital it is for HMRC to bring focus to its efforts in this area.
“From this month there are significant changes in senior management at HMRC. The Public Accounts Committee will expect the incoming regime to respond to the challenges and shortcomings we have highlighted with renewed vigour."
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