HMRC slammed by MPs over £25bn tax escape

A committee on MPs has accused HM Revenue & Customs of offering ‘cosy’ deals to big businesses to settle their tax bills.

A report by the Public Accounts Committee said it had “serious concerns” over how some settlements were reached, citing over £25bn of outstanding tax issues with big firms.

The report calls for HMRC to be more open when it deals with the large tax bills and has singled out permanent secretary for tax Dave Hartnett for criticism, claiming he does not handle tax negotiations properly.

The MPs claim that Hartnett mishandled tax negotiations with big companies like Goldman Sachs, subsequently letting it off millions of pounds in interest on its tax bill. They also claim Hartnett stonewalled their questions at committee meetings in October and November 2011.

Public accounts committee chair Margaret Hodge said: “This report is a damning indictment of HMRC and the way its senior officials handle tax disputes with large corporations.”

“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.”

A spokesman for HMRC said: “”The report is based on partial information, inaccurate opinion and some misunderstanding of facts,”

“The idea Dave Hartnett cuts a large tax bill in return for a glass of wine and a cheese sandwich is just plain nonsense.

“If he was interested in feathering his nest he would have accepted one of the many highly lucrative offers of work he regularly receives from the private sector.”

Hartnett is due to retire in the summer of 2012.

UK Uncut Legal Action, a direct action group, plans to use the report to start proceedings against HMRC over the “sweetheart” deal with Goldman Sachs.

The group is taking HMRC to the High Court on Thursday as it looks for a judicial review to reclaim millions of pounds from Goldman Sachs.