Unfriendly altitude to British tax-payers encourages evasion, non-compliance, PAC report says

LONDON, Nov 8: The British government has set a target for this year to triple annual prosecutions for the most serious tax evasion to 100 each year. It plans to create a “strict liability” offence of offshore tax evasion, according a report in the international media. This means that an individual can be prosecuted regardless of whether there was an intention to break the law.

A recent report by the cross-party public accounts committee (PAC) of the British Parliament. has criticised Her Majesty’s Revenue & Customs (HMRC) for its failure to provide any indication of when or by how much its customer service would improve, beyond a vague aim to improve year on year.

The media report adds that HMRC, as the PAC report said, has acknowledged that people are more likely to pay the right tax when they find the system easy to deal with.

The critical tone of the PAC report, as the media report adds, is a sign that the committee does not intend to relax the pressure established by its predecessor. The latter had launched blistering attacks on HMRC under the combative chairmanship of Margaret Hodge, a senior Labour MP.

The latest PAC report has complained that despite its previous recommendations, HMRC has not yet reported on how much cash has been received as a result of its compliance work. It has given neither full details of tax relief’s, nor estimated the scale of aggressive tax avoidance that exploited loopholes in the law.

The committee has also criticised the number of criminal prosecutions for offshore tax evasion, which it said is “still woefully inadequate”, the report says.

MPs, according to the media report, have lambasted HMRC over its customer service, raising fears that its “unacceptable” performance is having an adverse impact on the collection of tax revenues.

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”, the report adds.