Big Business Treated 'More Favourably' By Taxman

A report by MPs has issued a 'damning indictment' of the UK's tax service, accusing big business and the tax department of having a 'cosy relationship'.

The Commons Public Accounts Committee report found there was more than £25 billion outstanding in unresolved tax bills and criticised HM Revenue and Customs (HMRC) officials for refusing to cooperate with the enquiry.

Speaking at the launch of the report, Margaret Hodge, Chair of the Committee of Public Accounts, 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.

"Having looked at the two cases in the public domain, we are concerned that many millions of pounds may be lost to the public purse."

The highly critical report said HMRC had used the "cloak of confidentiality" to protect individual taxpayers and to protect the Department from scrutiny.

Ms Hodge said it was "absurd" that the committee had to rely on the media and the actions of a whistleblower to find out about the details of individual settlements during their investigation.

"Parliament and the public have legitimate concerns that large companies are being treated more favourably than ordinary taxpayers, whether they be small businesses or hard-working families," Ms Hodge said.

The committee Chair added that, in several cases, the same HMRC officials who negotiated deals also approved them, which she described as "extraordinary".

"In one instance, a mistake led to a potential £20 million of interest on a tax liability not being collected. Parliament and the public must be assured that settlements do not short-change the Exchequer."

Margaret Hodge was speaking as the committee published its 61st Report of this Session, which examined tax disputes.

In March this year, HMRC was seeking to resolve tax issues valued at over £25 billion with large companies, some of which included disputes over outstanding tax.

The committee said they had serious concerns about how the department handled some cases involving large settlements, where governance arrangements were bypassed or overlooked until it was too late.

It called for proper separation between the negotiation of tax settlements and the authorization of such settlements, while HMRC was told to address issues of accountability so that Parliament and the public can be satisfied that best value is secured.

(DW)