MPs accuse HMRC of favouring big businesses

20 Dec 11

A group of MPs have accused HM Revenue and Customs (HMRC) of systematic failures in the way it resolves tax issues with large companies.

The report from the Public Accounts Committee, implies that larger businesses are receiving favourable treatment when it comes to settling outstanding tax. The MPs claim that there is more than £25 billion outstanding in unresolved tax bills from larger businesses, but that they have 'serious concerns about how the Department handled some cases involving large settlements.'

The report claims that senior HMRC officials had bypassed or overlooked governance arrangements, and in some cases negotiated and approved the settlements with large companies themselves. It goes on to accuse these officials of failing to cooperate, saying:

"We accept that there is a need for confidentiality to protect individual taxpayers, but this must not be used as a cloak to protect the Department from scrutiny."

But HMRC claims that the report is based on partial information, in response to the report, a HMRC spokesperson said: "HM Revenue & Customs rejects the conclusion of the Public Accounts Committee that there are systemic failures in the management of tax disputes. The report is based on partial information, inaccurate opinion and some misunderstanding of facts.

"HMRC's internal processes are robust and this was confirmed by a recent review by the National Audit Office of large business settlements. We agree that public confidence in our processes is important, and as we have already informed the Public Accounts Committee we propose to make further improvements to our governance and to increase transparency about our work with large business. We also welcome the further review that the National Audit Office is to carry out as an opportunity to confirm this and clear up the concerns about foregone millions."

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