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Heated exchanges during PAC hearing into HMRC accounts

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The Public Accounts Committee (PAC) conducted a hearing into HMRC’s annual report and accounts for 2012/13 on Monday. During the often quite heated exchange, Edward Troup, HMRC’s tax assurance commissioner, told the PAC that the tax recovered from a deal with Switzerland would be far less than the £3.12bn expected by the chancellor this year, with only £440m having been recovered this year so far (£782m in total). Margaret Hodge, chair of the PAC, responded: ‘At the moment, you are more than £2.5bn light [for 2013/14]. At best, you will get a quarter of what you said – at best, on current trends. Who is being held to account for that failure? It’s an Alice in Wonderland figure, isn’t it?’ Troup admitted the amount was ‘significantly less than expected’, and blamed the lack of ‘hard information’ and ‘Swiss banking secrecy’ for the small tax take under the UK/Swiss deal, adding that HMRC ‘conveyed our concern about the amounts that we were receiving.’

Meanwhile, The Guardian reported that Google had ‘privately confirmed [to the newspaper] that an HMRC review of its intra-company dealings between operations in the UK, where many sales staff are employed, and Ireland, where UK sales are booked, was ongoing’, something referenced in the hearing when Jim Harra, HMRC director general of business tax, confirmed that ‘we met [the Google tax whistleblower Barney Jones], took evidence from him and paid a great deal of interest to what he had to tell us ... I can say that both in the particular case of this whistleblower and more generally, we always act on the evidence that we are given’, to which Margaret Hodge replied: ‘I hear that you act, but bluntly, we do not see it. You have not litigated; you have not tested.’

Other topics raised at the PAC hearing (which also took evidence from HMRC director general of enforcement and compliance Jennie Granger) included the eurobonds furore revealed in The Independent last week, questions over HMRC’s estimate of the tax gap and its non-executives, and VAT avoidance in the NHS.