Not doing enough being done to cut tax avoidance in UK, say MPs

LONDON: Britain’s tax collection agency is not doing enough to tackle multinational firms who use complex company structures to reduce their tax bills, a report by MPs said on Tuesday.

Britain has sought to take a leading role in international efforts to reduce legal tax avoidance methods used by companies such as Amazon.com Inc and Google Inc to shave billions of dollars off their tax bills.

However, a report by a committee of MPs examining domestic progress on the issue cited concerns that some government tax breaks could actually facilitate avoidance, and that standards for allowing firms to base themselves in Britain for tax purposes were less rigorous than in other EU states.

“HMRC (Her Majesty’s Revenue and Customs) does not do enough to tackle companies which exploit international tax structures to minimise UK tax liabilities,” the report said, calling for greater transparency over the agency’s progress in identifying and addressing tax avoidance structures.

The report also took aim at HMRC for being “unacceptably slow” at recovering revenues lost to personal tax avoidance schemes, and for a lack of transparency over how it measures its own performance.

The agency defended itself in a statement and said it was becoming clear to both promoters and users of such schemes that “we will robustly tackle tax avoidance wherever it happens…”

“We are also effectively challenging multi-nationals whilst bringing in the colossal sum of £31 billion from large business since 2010 alone,” it said in response to queries.

HMRC is under political scrutiny ahead of a May 2015 national election, with both the Conservative-led government and the opposition Labour party counting on increased tax receipts from clamping down on avoidance schemes in their plans to help reduce the country’s budget deficit.

The government in March said it hoped to raise 4 billion pounds by 2018/19 by changing tax rules to force those involved in legal battles over tax-avoidance schemes to pay their disputed bills in advance.- Reuters