HMRC’s tax evasion problem

The true scale of tax evasion is being hugely underestimated due to gaps in the system enabling it to go undetected. That’s the main – and most disappointing – thrust of the latest report from the Public Accounts Committee (PAC) (see ‘Tax evasion in the retail sector’ tinyurl.com/pacreport12feb). In what could be taken as a stinging criticism of current HMRC activity the committee says there is now a need for both a clear strategy to tackle tax evasion and increased powers for public bodies to address fraud.

It is not a wild guess to say that HMRC probably thought it already had a tax evasion strategy in place. But PAC’s argument centres on what it sees as HMRC’s underestimation of the level of tax evasion and a supposed lack of curiosity when it comes to investigating the issue. It is a problem fuelled according to...