HMRC giving taxpayers 'worst of both worlds', say MPs

HMRC is "still failing UK taxpayers" with incredibly poor customer service standards that are hindering effective tax collection, according to a damning report by the Public Accounts Committee.

The influential group of MPs, which has had run-ins with the agency in the past, has published a report criticising HMRC for failing to significantly improve its rate of only answering around half of phone calls from taxpayers. It also attacks HMRC's "woefully inadequate" record on prosecuting offshore tax evaders.

Just 11 people have been charged for hiding money overseas in the past five years, the BBC says. It adds that HMRC prefers to offer incentives for people to come forward rather than pursuing lengthy criminal proceedings against tax evaders.

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The BBC's Jonty Bloom says the PAC is alleging that Brits have "the worst of both worlds when it comes to our tax system". It is angry that "honest, hard-working people who want to pay their taxes can't get through to HMRC because phone calls aren't answered, while tax evaders aren't even prosecuted when they are caught".

HMRC does not dispute that its customer service needs to improve and says it is recruiting more people to increase resources. The organisation has seen its budget cut from £3.4bn to £3.1bn over the past five years and as many as 11,000 full-time positions have been lost, according to the PCS union.

But the tax office has hit back at criticism of its enforcement policy. It claims prosecutions are uncertain, expensive and often less effective than initiatives to encourage people to come forward. It claims to collect more tax by getting non-payers to meet backdated bills with fines on top.

HMRC also says it is "disappointed" that the committee "has overlooked HMRC's record results, which include collecting a record £517bn in tax revenues" despite its budget constraints.

The Guardian says the MPs have also asked HMRC to publish more detailed information about tax reliefs. The Office for Tax Simplification has identified 1,156 tax reliefs while HMRC only lists 400. The report says the body should "identify which reliefs it considers require monitoring and evaluation and… which reliefs may require further scrutiny or legislative change."