• Register
Return to: Home > News > HMRC captured by corporate interests and crippled by public accountability deficit: Labour’s independent review calls for reform

HMRC captured by corporate interests and crippled by public accountability deficit: Labour’s independent review calls for reform

An independent review commissioned by the UK Labour party to be released today  (8 September) is expected to recommend tackling a perceived public accountability deficit, the main structural problem of the UK tax collection authority, which is seen as being too close to big corporations, The Accountant has learnt.

The independent review is entitled Reforming HMRC: Making it Fit for the Twenty-First Century and is the result of an investigation of a fourteen-strong team of experts led by Prem Sikka, professor of accounting at the University of Essex.

The independent review, which Labour will use to inform its policy making, was commissioned in October 2015 and submitted in the end of April. It’s based on the external input of over one hundred business advisers and 2,100 HMRC employees surveyed.

One of its main findings is that HMRC suffers a crisis of public accountability, in the sense that the UK tax authority seems to be too tough on smaller taxpayers and too lenient on big corporations when it comes to collecting revenues and following up inspections.

In the UK, the tax gap (the amount of uncollected tax, due among other reasons to avoidance and evasion) ranges from the Government’s £35bn figure to the £120bn figure ($46bn to $160bn), which watchdogs and many commentators suggest.

Among the recommendations is to create a supervisory board made up of stakeholders, including employees, SMEs and taxpayers in an attempt to make the organisation more accountable to the public.

The review is expected to raise concerns about the cuts on staff, at least 40,000 employees in the last 12 years, which has reduced the quality of services for ordinary taxpayers.

In addition, the review might highlight that accountancy firms, often masterminds of avoidance schemes, outnumber HMRC’s transfer pricing specialists by at least five times.

However, the review would emphasise that every one pound invested in anti-avoidance measures by HMRC generates £76 of income.

Another issue expected to be underscored by the review is that although the number of prosecutions has increased, almost a third of those are petty cases which amount to less than £10,000, thus missing out on the big corporations able to avoid or evade higher tax revenues.

Top Content

    Illicit financial flows: the Crippling of african economies and the accountants’ guilt

    At the Africa Congress of Accountants (ACOA 2017) held in Uganda in May, a panel of experts looked at the impact of illicit financial flows on African economies and the role of the accountant in combating such transactions. The panellists’ presentations were followed by a Q&A session with the audience. highlights of the Q&A are published below. Compiled by Vincent Huck

    read more

    In the land of a thousand hills: a long hike uphill – but rwanda is determined to build the profession

    Amin Miramago was appointed CEO of the Institute of Certified Public Accountants Rwanda in March this year. While attending the Africa Congress of Accountants in May he spoke to Vincent Huck about iCPAR’s strategic plan and how the institute aims to contribute to the Rwandan government’s objective to make the country the financial hub of the region.

    read more

    Cayman islands: in search of tax legitimacy

    Cayman Finance CEO Jude Scott defends the Cayman Islands’ track record in tax transparency and the quality of its financial services. Interview by Vincent Huck

    read more

    Comment: Greek Steps Forward

    By Ian Ball, chairman, CIPFA International

    read more

    The next generation’s take on a profession desperate to attract talent

    To celebrate international youth day, The Accountant asks professionals aged under 35 to share their thoughts on the profession: why they qualify as accountants, whether it was challenging and, now that they are in, how they see the profession and where it is going.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.