The Parliamentary Public Accounts Committee has claimed that the UK taxman has failed to collect over Â£25 billion from big companies.
But whilst these ‘unresolved tax bills’ are left forgotten HMRC has continued with a programme of virtually hounding the ordinary taxpayer and business community with backdated tax demands to fill the Treasury’s black hole.
To make matters worse, HMRC is hiding behind the law to prevent the details of the ‘sweetheart’ deals that it made with some big firms from coming under scrutiny says the Guardian.
It appears that Goldman Sachs got Â£20 million reduction in their tax bill due to a mistake and Vodafone only paid Â£1.25 billion out of a possible bill of at least Â£6 billion.
This Â£25 billion, says the Telegraph, is the equivalent to Â£1,000 for every family in the UK.
The chair of the committee, Margaret Hodge said:
This report is a damning indictment of HMRC and the way its senior officials handle tax disputes with large corporations. We uncovered both specific and systemic failures which must be addressed.
There is more than Â£25â€‰billion outstanding in unresolved tax bills and it is essential there should be proper accountability to Parliament for the settlements reached.
Parliament and the public have legitimate concerns that large companies are being treated more favourably than ordinary taxpayers.
The department’s working practices must be seen by the taxpaying public to be absolutely impartial. The impression being given at the moment is quite the opposite, of far too cosy a relationship between HMRC and large companies.
Even worse is that the committee had to rely on a whistleblower, HMRC lawyer Osita Mba, as well as the media to get the story. They did not get it from officials.
You have to ask yourself why did those involved in making these deals think they had the power to not only shake hands on them but then effectively hide them from scrutiny.
This news that the ordinary person in the street is treated more harshly than big corporations in some sort of secret star chamber set-up will not go down well with the general public and their vitriol may well be aimed at the government, which is desperate to raise every penny it can in these straitened times.
There will be the perception that what these sweetheart deals have done is given these big corporations a tax break at the expense of the little people; the very same little people that made these corporations rich and powerful in the first place.
But where big companies are concerned there will always be disputes over tax down not only to the complexity of the companies involved but also the tax regime itself.
It would therefore be quite a sensible thing to do for a ‘deal’ to be struck so that the maximum tax is taken without resorting to endless toing and froing and court battles, which could cost us all more in the long run (lawyers excepted of course).
What may be of real concern is how easily the taxman caved in to make a deal and move on as well as why.