The Treasury select sub-committee says it has serious concerns about the accountability and transparency of HM Revenue and Customs.
In a new report, entitled, Closing The Tax Gap: HMRC’s Record at Ensuring Tax Compliance, published last week, the sub-committee warns that there are “serious questions” about HMRC’s accountability.
It says treating all taxpayers fairly will increase voluntary compliance and is the best way to close the tax gap, which HMRC estimated to be £35bn in 2010. That is 8 per cent of the total tax liability.
The report welcomes recent changes made in the wake of controversy over deals struck with big corporations.
Sub-committee chair and Labour MP George Mudie says: “It is encouraging HMRC has recognised its processes for settling tax disputes were flawed and is implementing changes but serious questions remain about accountability and transparency of HMRC’s governance, both at ministerial and board level. Taxpayers must have confidence that HMRC is being even-handed, otherwise voluntary compliance with the tax code could suffer.”
The report also criticises the UK’s tax deal with Switzerland which will see Swiss authorities collect tax from accounts held by UK taxpayers.
It says: “The rates of tax to be withheld from income and capital are lower than the top rates of tax in the UK. This seems to reward those who have deliberately avoided tax over those who have not.”