MPs warn the taxmen to get their act together on tackling fraud and evasion

A committee of MPs has warned tax collectors that they need to get their act together to meet Government targets on tackling tax fraud and evasion.

In its report, the House of Commons Public Accounts Committee said HM Revenue and Customs (HMRC) needed to work out how best to get closer to the eighteen billion pounds in extra tax revenue needed.

According to the document, HMRC netted a total of eight and a half billion pounds last year, an increase of fifty per cent over the amount collected in 2007/08. At the same time, they cut their departmental costs by ten per cent.

But, said the cross-party committee, they will have to improve their performance further while making more departmental savings.

The report went on to say that senior officials will need to "show strong leadership" to meet targets and improve staff morale, which was described as at a "low ebb".

Committee chair Margaret Hodge urged HMRC to set more demanding targets for its investigation teams and to speed up fraud cases, only a quarter of which are completed within eighteen months.

She said that the level of penalties imposed on fraudsters has been too low, with more than one in four cases resulting in a fine of less than 10% of the tax due and one in seven attracting no penalty at all.

Ms Hodge went on to say that: "A crucial point is that the Department has lacked detailed information on how much different types of enforcement activity cost and what the returns are. It will need this information to meet the challenge of the new target."

According to HMRC figures, an estimated fifteen billion pounds of tax is lost each year through evasion, fraud and criminal attack.

A spokesman for HM Revenue and Customs said: We welcome the committee’s recognition that our compliance approach is already delivering results and that we are ambitious to go further."

HMRC went on to say that: "the additional nine hundred and seventeen million pounds provided, at the spending review, for tackling avoidance, evasion and fraud will enable us to build on this foundation and deliver seven billion pounds of additional revenue a year by 2014/15."

ENDS

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