“The latest figures show that tax fraud costs the UK £16bn a year.
HMRC plays a vital role in tackling tax fraud and the PAC has rightly
highlighted a number of areas where HMRC could do
more to address the
challenges in this area”.
“ICAEW supports Government efforts to tackle tax fraud. However, the
UK tax system is already struggling to cope with the demands being
placed on it. Our tax code is overly complex and places a significant
regulatory and compliance burden on taxpayers, particularly on small
businesses whose focus should be on contributing to economic growth. Our
experience of HMRC is that it is also struggling to cope, being caught
in the crossfire of having more demands placed on it while having its
budget and headcount reduced. While HMRC should be challenged ‘to do
more with less’, we think there is a limit to what can be achieved
without more resources being made available”.
“In order to do more to tackle tax fraud and reduce the tax gap,
Government needs to consider further investment into HMRC, not just to
reduce the tax gap but also to provide a more efficient and effective
tax system, as good tax administration underpins good tax compliance. We
should remember that HMRC is in the process of further restructuring
and has a new leadership team. This is in addition to many years of
constant cuts to budgets and staff which have affected its performance
and its ability to chase down tax fraud. If HMRC is to successfully
reduce the tax gap while improving its administration of the tax system
for all taxpayers, it needs to be properly resourced.”