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HMRC still not doing enough to tackle tax fraud, say MPs HMRC still not doing enough to tackle tax fraud, say MPs
(about 1 hour later)
HM Revenue and Customs (HMRC) is still not doing enough to tackle tax fraud, a group of MPs has said.HM Revenue and Customs (HMRC) is still not doing enough to tackle tax fraud, a group of MPs has said.
Members of the Public Accounts Committee (PAC) said taxpayers were missing out on £16bn a year, as a result of evasion and criminal activity.Members of the Public Accounts Committee (PAC) said taxpayers were missing out on £16bn a year, as a result of evasion and criminal activity.
HMRC needed to increase the number of investigations, and prosecute more wealthy tax evaders, the MPs said.HMRC needed to increase the number of investigations, and prosecute more wealthy tax evaders, the MPs said.
But HMRC said it was one of the most effective tax collectors in the world.But HMRC said it was one of the most effective tax collectors in the world.
'More prosecutions''More prosecutions'
Labour MP Meg Hillier, the chair of the PAC, told BBC Radio 4's Today programme that HMRC "could clearly be doing more" with the "right resources". Labour MP Meg Hillier, the chair of the PAC, told BBC Radio 4's Today programme that HMRC "could clearly be doing more" with "the right resources".
"We have long felt that there should be more prosecutions because we think that sends a signal to the honest tax payer who is sweating over their tax returns and also a warning shot to those who are thinking about being fraudulent," she said."We have long felt that there should be more prosecutions because we think that sends a signal to the honest tax payer who is sweating over their tax returns and also a warning shot to those who are thinking about being fraudulent," she said.
Ms Hillier pointed out that over the last five years the level of tax losses - the difference between the tax that should be collected and the amount that is actually collected - had remained static at around 3% of all the tax owed to the Treasury.Ms Hillier pointed out that over the last five years the level of tax losses - the difference between the tax that should be collected and the amount that is actually collected - had remained static at around 3% of all the tax owed to the Treasury.
She acknowledged the job of HMRC was "challenging" and welcomed international cooperation on tax evasion.She acknowledged the job of HMRC was "challenging" and welcomed international cooperation on tax evasion.
'Inadequate''Inadequate'
Earlier this week the government announced a series of measures to tackle the issue of offshore tax evasion, as a result of the release of the Panama Papers.Earlier this week the government announced a series of measures to tackle the issue of offshore tax evasion, as a result of the release of the Panama Papers.
Eleven million confidential documents from a Panamanian law firm revealed how the rich exploit tax havens to hide their wealth.Eleven million confidential documents from a Panamanian law firm revealed how the rich exploit tax havens to hide their wealth.
"The release of the 'Panama Papers' underlines that there are wealthy people and companies who seek to keep their affairs secret," said Meg Hillier."The release of the 'Panama Papers' underlines that there are wealthy people and companies who seek to keep their affairs secret," said Meg Hillier.
According to the report, HMRC had said it investigates around 35 wealthy individuals for tax evasion each year.According to the report, HMRC had said it investigates around 35 wealthy individuals for tax evasion each year.
But it told the MPs that it did not know how many had been successfully prosecuted.But it told the MPs that it did not know how many had been successfully prosecuted.
In addition, only one person was prosecuted after a former HSBC employee called Herve Falciani handed over a list of potential tax evaders with Swiss bank accounts in 2015.In addition, only one person was prosecuted after a former HSBC employee called Herve Falciani handed over a list of potential tax evaders with Swiss bank accounts in 2015.
The MPs said that created the impression that the rich can get away with tax fraud.The MPs said that created the impression that the rich can get away with tax fraud.
It follows a previous PAC report last November, in which the MPs said the number of prosecutions by HMRC was "woefully inadequate".It follows a previous PAC report last November, in which the MPs said the number of prosecutions by HMRC was "woefully inadequate".
But as a result of extra funding given to it in the Summer 2015 budget, HMRC said it now hoped to investigate 100 companies and wealthy individuals each year by 2020.But as a result of extra funding given to it in the Summer 2015 budget, HMRC said it now hoped to investigate 100 companies and wealthy individuals each year by 2020.
'Relentless''Relentless'
The current tax gap is around £34bn a year - half of which is down to fraud.The current tax gap is around £34bn a year - half of which is down to fraud.
But HMRC said it collected 93 pence of every pound due, making it one of the smallest tax gaps in the world.But HMRC said it collected 93 pence of every pound due, making it one of the smallest tax gaps in the world.
"We remain relentless and strategic in tracking down the few that try to get out of paying their fair share," a spokesperson said."We remain relentless and strategic in tracking down the few that try to get out of paying their fair share," a spokesperson said.
It said it had 26,000 staff focusing on evasion, avoidance and fraud.It said it had 26,000 staff focusing on evasion, avoidance and fraud.
Nevertheless the MPs said HMRC had not set out a clear strategy, and it should do so by November 2016.Nevertheless the MPs said HMRC had not set out a clear strategy, and it should do so by November 2016.
Jon Thompson takes over as the new chief executive of HMRC this month, following the departure of the previous boss, Lin Homer.Jon Thompson takes over as the new chief executive of HMRC this month, following the departure of the previous boss, Lin Homer.