MPs slam HMRC for giving big firms 'cosy' treatment
Posted by Natalie Brandweiner in Finances, Business trends on Tue, 20/12/2011 - 11:51
A damning report from the House of Common’s Public Accounts Committee has accused HM Revenue and Customs (HMRC) managers of having a "cosy relationship" with big business and bending the rules to provide "preferential treatment", compared to its dealings with small firms.
In their findings, the influential group of MPs said they were concerned "that large companies appear to receive preferential treatment compared to small businesses and individuals". Examples include the time firms are allowed to pay their tax liabilities without incurring interest charges.
The report, commissioned to resolve over 2,700 issues with big firms, including disputes over outstanding tax worth £25.5bn, was published just days after HMRC announced the unexpected retirement of permanent secretary for tax David Hartnett.
The committee accused Hartnett of settling complex tax disputes with big firms over a "significant number" of informal lunch and dinner meetings. Protest group UK Uncut previously branded him as "the most wined and dined civil servant in Whitehall" and called for his resignation.
Also included in the report, which called for a National Audit Office investigation into corporate tax, was the revelation that due to a "mistake" by HMRC, Goldman Sachs was let off the interest of around £8m on its settlement. According to HMRC whistleblower Osita Mba, the true figure could be nearer £20m. In addition, Vodafone settled a dispute for £1.25bn when allegedly the sum should have been nearer £6bn, the MPs said.
"There is more than £25bn outstanding in unresolved tax bills and it is essential that there should be proper accountability to Parliament for the settlements reached by HMRC."
A HMRC spokesperson said the Department didn't accept this claim and claimed that HMRC has "the technical skills underwritten by our Litigation and Settlement strategy to ensure that even the largest corporates meet their liabilities".
Treasury minister David Guake added: "The government has full confidence in HMRC and its current leadership. I welcome the fact that the Department is already taking steps to strengthen its governance further, including the appointment of two new Commissioners with tax and financial expertise."
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