PAC tells Revenue to do more to tackle tax-dodgers

11 Dec 08
Revenue and Customs came under fire from senior MPs this week for failing to plug the £2bn hole of unpaid tax in the hidden economy

12 December 2008

By Julie Read

Revenue and Customs came under fire from senior MPs this week for failing to plug the £2bn hole of unpaid tax in the hidden economy.

The Public Accounts Committee reported that R&C had spent £41m in 2006/07 pursuing the estimated 2 million people who fail to pay tax, but that its detection rate is only 1.5%.

MPs urged R&C to impose heavier fines on those it uncovers and to boost the number of prosecutions, currently two out of a thousand detected.

PAC chair Edward Leigh MP said that R&C was 'apparently making little ground in its efforts to diminish the cash-in-hand culture operating in the UK'.

The PAC said R&C should invest in a big publicity drive on the benefits of paying tax and the dangers of not doing so. The campaign should be aimed at trades with high offending rates, such as builders and decorators, buy-to-let landlords and internet traders.

The report, published on December 9, said: 'The department has had some success at motivating people with offshore accounts to come clean and voluntarily pay the tax they owe. It should devise similar schemes to persuade those in other risk areas, such as self-employed builders and buy-to-let landlords, to put their tax affairs in order.'

A spokesman for R&C said: 'HMRC is committed to deterring and challenging those who do not pay their fair share.'

PFdec2008

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