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20 December 2011

Tax avoidance: HMRC stands accused

Vindication for UK Uncut as MPs attack HMRC's "cosy" relationship with big business.

By George Eaton

In these straitened times, £25bn could go a long way. It’s the amount that MPs on the Public Accounts Committee claim that HM Revenue and Customs (HMRC) has failed to collect in “unresolved tax bills”. The nation’s tax collecters stand accused of treating large companies “more favourably” than ordinary taxpayers, of maintaining a “cosy” relationship with the likes of Goldman Sachs and Vodafone, and of providing “no accountability” about whether their deals provide good value for money.

In a bravura performance on the Today programme, Margaret Hodge, the chair of the committee, denounced HMRC officials for their lack of transparency, revealing that the committee relied on “whistleblowers and Private Eye” to expose alleged tax avoidance. “We found that the head of tax had a cosy relationship with many of the businesses with which he had to negotiate,” she said in a quietly damning statement. Indeed, Dave Hartnett, the permanent secretary for tax, has enjoyed 107 dinners and lunches with companies, tax lawyers and advisers over the last two years. When called into parliament to answer questions he gave “imprecise, inconsistent, and potentially misleading” information. Vindication for UK Uncut, it seems, is at hand.

The report makes the front pages of both the Daily Telegraph (“Why double standards by taxman mean you pay more”) and the Daily Mail (“Big firms let off £25bn in taxes”), a sign that even the right realises it cannot be seen to favour the undeserving rich, to apologise for the overclass.

For the record, HMRC claims that the report is based on “partial information, inaccurate opinion and some misunderstanding of fact”. It added: “Senior HMRC officials sought to be co-operative by providing as much information as possible within the legal constraints of taxpayer confidentiality.” But the onus is now on it to provide answers, rather than obfuscation.

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