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Tax dodgers getting easier ride than welfare claimants

Public accounts committee says cuts-hit HMRC 'unacceptably slow'

Coalition persecution of people living on welfare stands in stark contrast to its failure to hunt down tax dodgers, an MPs' report suggested yesterday.

A study by the influential parliamentary Commons public accounts committee (PAC) said that tax dodgers were being pursued at "unacceptably slow" levels by HM Revenue and Customs - where thousands of jobs have been axed and dozens of offices closed.

It also said that targets for identifying and pursuing tax dodgers had been set too low.

"HMRC must do more, faster," said PAC chairwoman Margaret Hodge.

"It should report on the progress it has achieved by using new powers granted by Parliament to tackle tax avoidance and show that it is using its existing powers with sufficient urgency.

Economic investigation organisation Tax Research UK estimated that £119 billion was being lost to the Exchequer in unpaid taxes.

In the last nine years staff numbers at HM Customs and Revenue (HMRC) - including the people who pursue tax dodgers - have been slashed from 92,000 to 62,000 with another 10,000 job losses planned.

The PAC said that action against tax avoiders continued to be "unacceptably slow, putting tax revenues at risk."

It raised concerns about HMRC's sluggish progress after receiving information identifying 3,600 Britons who were potentially avoiding tax using the Geneva branch of British transnational bank HSBC.

Ms Hodge insisted that HMRC was not doing enough to tackle companies which exploit international tax structures to minimise British tax liabilities.

"HMRC should make sure the governance arrangements around its performance are sufficiently robust," she said.

Labour shadow Exchequer secretary to the Treasury Shabana Mahmood MP said the findings showed "once again the total failure of ministers and HMRC" to tackle tax avoidance.

"It follows figures showing the amount of uncollected tax rose in the latest year and has gone up by £3bn on George Osborne's watch," Ms Mahood said.

"At a time when working people are paying more and the deficit is still high this is unacceptable."

She added that Labour would close tax "loopholes."

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