MPs call for tougher tax probes from HMRC

<p>MPs have claimed that authorities are not doing enough to crack down on tax avoidance. </p>

HM Revenue and Customs (HMRC) has faced criticism from the Public Accounts Committee for not being quick enough in tackling the problem of tax avoidance.

The body was accused of being "unacceptably slow" in addressing the problem, with Labour MP Margaret Hodge, chair of the committee, warning action previously taken against tax avoidance schemes could just be "the tip of the iceberg".

A scheme known as Liberty boasted as many as 2,000 users and, according to Ms Hodge, as much as £10 million of avoided tax might not be recoverable to authorities.

Liberty was reportedly used by a number of celebrities, including Katie Melua, George Michael and Gary Barlow and may have hidden away as much as £1.2 billion from the Treasury.  

"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," Ms Hodge said.

Among the concerns expressed by the PAC was the perceived slow progress of authorities in acting on information gathered from the Falciani list, which identified 3,600 individuals that allegedly had the potential of avoiding tax using Swiss bank accounts.

Ms Hodge continued by stating that the UK needed to do more in order to ensure it was not falling behind other EU nations.

"Some international tax experts believe that the UK's tests for companies to gain tax residency are less rigorous than in other EU jurisdictions.

"Research into seven companies who have recently relocated to the UK for tax purposes showed very little inward investment was generated or jobs created in the UK in return for the tax benefits the companies receive," she added.

In response to the allegations, a spokesperson for HMRC argued that it was working in a way that made it clear that the use of avoidance schemes was soon to be cracked down upon.

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