The Public Accounts Committee has criticised HM Revenue & Customs has been criticised by The Public Accounts Committee who have voiced concerns about the Taxmans for “unacceptably slow” action against tax avoiders.

Chairman of the committee, Margaret Hodge, said the lack of action from HMRC was putting tax revenues at risk: “HMRC must do more, faster.”
She highlighted that a tax avoidance scheme originally closed in 2009 was not taken to a tribunal until this year, 5 years later.

As much as £10m of taxes avoided by 2,000 users of Liberty, a tax avoidance scheme, may never be recoverable, Mrs Hodge said, because in 30 cases HMRC failed to start inquiries into personal tax returns within the 12 month deadline.

“Although HMRC says Liberty was an exceptional case among the 750,000 personal tax return inquiries each year, it was unable to tell us how much delays had cost across the different tax avoidance schemes,” she said.

Liberty was a controversial investment scheme designed purposely to avoid tax, and reportedly used by celebrities including well known entertainers Katie Melua, George Michael and Gary Barlow.

MP’s have called upon HMRC to use the new powers granted by parliament to tackle tax avoidance and report on its progress.

In December 2013, the MPs accused HMRC of “losing its nerve” when mounting tax prosecutions against multinational corporations.

The committee also highlighted the £1.9bn error made by the Taxman when setting a baseline for its compliance work. The mistake went undetected for three years before its discovery.