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MPs criticise speed of tax crackdown

18 Nov 2014

HM Revenue & Customs’ (HMRC) action in recovering tax from avoidance schemes is ‘unacceptably slow’, according to the public accounts committee of MPs.

In a report released by parliament, the committee condemns the overstated success of recent tax crackdowns, citing a £1.9 billion calculation error.

Margaret Hodge, chair of the committee, said: ‘HMRC must do more, faster. It should report on the progress it has achieved by using new powers granted by parliament to tackle tax avoidance and show it is using its existing powers with sufficient urgency’.

The committee cited tax avoidance scheme Liberty, which helped up to 2000 individuals avoid a reported £10 million in taxes due to HMRC not acting within set deadlines. In total, Liberty is said to have helped shelter £1.2 billion which should have been collected by the Treasury.

Hodge added: ‘This may be just the tip of the iceberg. Although HMRC says Liberty was an exceptional case among the 750,000 personal tax return inquiries each year, it was unable to tell us how much delays had cost across the different tax avoidance schemes’.