HMRC is criticised for having ‘too cosy’ a relationship with large accountancy firms and for failing to come down hard enough on tax avoidance and evasion in the final reports of the Public Accounts Committee (PAC) for this parliament, which are also critical of the department’s failure to monitor the impact of tax reliefs in terms of cost to the Exchequer and potential tax avoidance abuse closely enough
Margaret Hodge MP, PAC chair, said: ‘Our hearings with the Big Four accountancy firms and promoters of marketed avoidance schemes have exposed a tax avoidance industry, comprising many large accountancy firms, tax advisers and lawyers, all of whom are making lucrative business out of designing and selling ways for their clients to avoid tax.
‘We remain concerned that HMRC’s relationship with these large accountancy firms is too cosy, and it needs to get much tougher in challenging the advice they give to their clients.’
Hodge said the committee welcomed government plans to introduce new offences to penalise those involved in advising or helping companies and individuals avoid or evade tax, but it was disappointing that HMRC has rejected PAC’s recommendation for a tougher code of conduct for tax advisers. She was also sharply critical of HMRC’s failure to prosecute more individuals named on the leaked list of undeclared offshore account holders with the Swiss private banking arm of HSBC.
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