The taxman has been accused of double standards by treating ordinary workers and small firms less favourably than large companies.HM Revenue and Customs have failed to collect more than £25 billion in “unresolved tax bills” from major firms — the equivalent of £1,000 for every British family — a committee of MPs claims.
The revenue has recently sought to raise hundreds of millions of pounds in extra revenues by cracking down on tax avoidance by workers. Penalties for those submitting self-assessment tax forms late are being increased and professional workers are being aggressively targeted by tax inspectors.
Last year 1.4 million people were sent backdated tax demands totalling almost £4 billion after problems with the PAYE system.
Yet at the same time, the parliamentary public accounts committee says revenue executives have become “unduly cosy” with larger firms and have tried to hide from public scrutiny details of a series of secret deals with companies.
The disclosure that ordinary workers may suffer from a less forgiving tax regime than large corporations at a time of economic hardship will anger voters and embarrass the Coalition, which has pledged to raise billions of pounds more by clamping down on avoidance schemes.
Margaret Hodge, the former Labour minister who chairs the committee, said: “This report is a damning indictment of HMRC and the way its senior officials handle tax disputes with large corporations. We uncovered both specific and systemic failures which must be addressed.
“There is more than £25 billion outstanding in unresolved tax bills and it is essential there should be proper accountability to Parliament for the settlements reached.
“Parliament and the public have legitimate concerns that large companies are being treated more favourably than ordinary taxpayers.
“The department’s working practices must be seen by the taxpaying public to be absolutely impartial. The impression being given at the moment is quite the opposite, of far too cosy a relationship between HMRC and large companies.”
Richard Bacon, a Tory MP on the public accounts committee, said it appeared that the revenue took “a softer approach to powerful firms while being tougher on small businesses. “Whether accurate or not, this notion is toxic for HMRC’s relationship with the vast majority of taxpayers,” he said.
HMRC officials summoned to appear before the committee refused to give details of deals agreed with large firms, including Vodafone and Goldman Sachs. Instead the committee had to rely on allegations from a whistle-blower, the HMRC lawyer Osita Mba.
In some of the most damning comments made by MPs against serving public officials, concerns are raised that “many millions of pounds may be lost to the public purse”.
Mrs Hodge said: “It is extremely disappointing that senior HMRC officials were not prepared to co-operate with our inquiry.
“It is absurd that we had to rely on the media and the actions of a whistle-blower to find out about the details of individual settlements.”
The committee also criticises governance arrangements at the revenue with the same officials responsible for negotiating and approving deals with major companies.
Read more here:http://www.telegraph.co.uk/news/politics/8967002/Why-double-standards-by-HM-Revenue-and-Customs-mean-you-pay-more.html
