HMRC has likely “vastly underestimated” the scale of tax evasion and shown a lack of curiosity about the root of the problem, according to a critical parliamentary report.
HMRC has been accused of deliberately poor customer service as well as failure to chase up debts effectively and to do enough to tackle abuse of the tax system.
Taxpayers have been let down by poor customer service at HMRC that has seen average call waiting times jump to 23 minutes, the National Audit Office has said.
HMRC closing a phone helpline for six months per year has drawn criticism from tax experts, including that self assessment returns might become less accurate.
The UK government seems to have decided it is easier to recoup money paid out in error to the poorest in society than from Covid-19 support scheme fraudsters, says George Turner.
The Treasury has written off the possibility of recovering most of the money lost to fraud and error during the pandemic, according to official documents.
A government anti-fraud team has recovered more than £1bn from tax offenders and criminals in the five years since it was set up, according to HM Revenue and Customs.
HMRC is expected to recoup less than half of the forecast £5.8bn lost through fraud and error on Covid-19 support schemes, according to the department's top civil servant.
Speed was key in rolling out the Coronavirus Job Retention Scheme, but HMRC didn’t overlook the potential for fraud, says the department's director responsible for Covid-19 compliance.
HMRC needs to make fundamental changes to how it collects tax, as compliance is expected to drop as a result of Covid-19, according to the Public Accounts Committee.
HMRC recovered £7.9bn less from fraud and error in the first three months of this financial year than it did in the same period in 2019 – a drop of more than half.
HMRC and the Treasury lack understanding of the effectiveness of tax reliefs while the cost of providing them has grown by 5% over five years, the public spending watchdog has warned.
