‘Woeful’ HMRC failing UK taxpayers, say MPs

The MPs accused HMRC of only answering half the phone calls to its customer care centre, and failing to carry out enough prosecutions.

Members of the Public Accounts Committee (PAC) said customer service was so bad that it could be affecting tax collection.

Meg Hillier, chair of the public accounts committee said: “It beggars belief that, having made disappointing progress on tax evasion and avoidance, the taxman also seems incapable of running a satisfactory service for people trying to pay their fair share.”

HMRC denied that its operations were hampering tax collection and said it had now recruited 3,000 more staff to help.

In 2011-12, HMRC answered 74 per cent of calls from the public, but by the start of 2015, it only answered 50 per cent of them, the MPs said.

Ms Hillier added that HMRC must “rapidly improve its customer service, previously described by the PAC as abysmal and now even worse”.

The MPs said HMRC had ignored some of their previous recommendations.

The latest report complained that despite its previous recommendations, HMRC still did not report on how much cash was received as a result of its compliance work, give full details of tax reliefs, or estimate the scale of aggressive tax avoidance that exploited loopholes in the law.

The committee also criticised the number of criminal prosecutions for offshore tax evasion which it said was “still woefully inadequate”.

It said: “HMRC’s investigations do not lead to sufficient prosecutions to provide an effective deterrent, particularly for wealthy individuals who hide their assets offshore.”

It said it was “incredible” and “woefully inadequate”that there had only been 11 prosecutions in relation to offshore tax evasion since 2010, and only one individual from the “Falciani list”, a list of 3,600 British Swiss accounts holders leaked by a former employee of HSBC, had been prosecuted.

Instead, the tax collectors have offered reduced penalties to people who come forward with information about money they have hidden overseas, something the committee said was no substitute for the “deterrent effect” of prosecution.

It said wealthy people who hide money offshore needed to be dealt with “robustly”.