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UK Lawmakers Seek Reassurances From HMRC

by Jason Gorringe, Tax-News.com, London

08 December 2016


UK lawmakers have called on HM Revenue and Customs (HMRC) to ensure that it continues to provide adequate customer service and take an international lead on tackling multinational tax avoidance, despite the pressure the tax agency faces.

In a new report, the Public Accounts Committee (PAC) noted that HMRC is under pressure to cut costs, restructure, and replace a major IT contract. It is also having to consider the impact of Brexit on UK tax rules and guidance.

The Committee said that while HMRC "is staking a great deal on the success of its plans to digitize the tax system," it is not convinced the tax authority has a "credible plan to make savings without damaging customer services."

"The lack of a convincing fall-back plan to safeguard service as HMRC undergoes significant change remains a looming threat to its ability to collect tax from individuals simply trying to pay their fair share," said Meg Hillier, Chair of the PAC.

"HMRC's senior management cannot afford to be complacent about the catastrophic collapse in customer service in 2014–15 and the first half of 2015–16, nor about what is at stake should their projections about demand for call centers prove wrong."

The Committee also urged HMRC and the Treasury to push for large multinationals to be more transparent about their tax affairs and "to increase the pressure on them to pay their fair share of tax."

The Committee noted that, although HMRC will receive a considerable amount of information on the tax arrangements of multinationals under the OECD's country-by-country (CbC) reporting framework, CbC reports will not be released publicly and therefore will not contribute to an improvement in transparency.

TAGS: individuals | compliance | tax | business | value added tax (VAT) | tax compliance | tax avoidance | law | employees | United Kingdom | tax authority | multinationals | HM Revenue and Customs (HMRC) | HM Revenue and Customs (HMRC) | services | BEPS

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