HMRC “Lose its Nerve” Over Big Businesses
A number of big companies such as Starbucks and Amazon have recently attracted criticism for hugely underpaying UK tax. Now, it has been claimed by the Public Accounts Committee that HMRC tends to lose its nerve when pursuing such big businesses.
In their report on HMRC’s annual accounts, the committee said that: “HMRC holds back from using the full range of sanctions at its disposal. It pursues tax owed by the smaller businesses but seems to lose its nerve when it comes to mounting prosecutions against multinational corporations.”
According to HMRC, the difference between tax due and tax collected – the “Tax Gap” – currently stands at around 7%, representing £35 billion of uncollected tax. However, some have claimed this figure does not adequately account for the aggressive tax evasion measures used by big businesses. Factors included in HMRC’s estimates include insolvencies and taxpayer error.