It must never be easier to cheat the tax system than comply, says parliamentary committee

Tax compliance yield was down by £9bn over the two years of pandemic according to a recent report from the House of Commons public accounts committee (PAC). It notes that HMRC redeployed more than 4 000 compliance staff to work on the government’s Covid support schemes but the result was that total tax revenues fell along with did compliance yield.

HMRC says its strategy is to prosecute the most serious forms of evasion and criminal activity and that it focuses on high-value and high-profile cases rather than large volumes of smaller cases but it does not expect compliance investigations and prosecutions to return to pre-pandemic levels. The PAC is concerned that without adequate numbers of prosecutions HMRC cannot demonstrate a credible deterrent effect. This makes it hard to have confidence that the department will live up to its claim that no tax will...