HMRC ignorance and inaction looks ‘soft on fraud’, says PAC

‘HMRC’s unambitious plans’ for recovering the £6bn it estimates it spent incorrectly in Covid-19 support payments – whether through fraud or mistakes – ‘risks rewarding the unscrupulous and sending a message that HMRC is soft on fraud’ according to the House of Commons’ public account committee (PAC). In a report on HMRC’s performance in 2020-21 MPs concluded customer service had collapsed and they were concerned about HMRC’s capacity to clear backlogs while tackling the ‘avalanche of error and fraud it now faces on the Covid-19 schemes’.

The report describes a litany of longstanding PAC concerns in HMRC’s fulfilment of its most basic remit of collecting tax owed including not responding adequately to tax avoidance schemes failing to implement or realise benefits from the making tax digital and other long-term transformation programmes and being without ‘a convincing plan for restoring compliance activity back...