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MPs will take further evidence on major tax settlements

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The Treasury Committee is to take further evidence with a view to establishing how HMRC can achieve better accountability around the settlement of large tax cases involving corporations, which the committee described as a ‘particular source of controversy’.

Last month the National Audit Office called on HMRC to ensure that a clear separation exists between the negotiation and approval of large tax settlements, to provide confidence to stakeholders on the appropriateness of all such settlements.

The NAO found that there was ‘no, or limited separation’ in three of the 27 cases they reviewed.

‘Allegations have been made in the press that cases have been settled inappropriately for a lower yield than might have otherwise been achieved,’ the Treasury Committee said in its report, Administration and effectiveness of HM Revenue and Customs, published at the weekend.

‘Dave Hartnett, the Permanent Secretary for Tax, vigorously defended the procedures that had been used to achieve a settlement with Vodafone and argued that figures cited in the press lacked credibility.’

The committee said it was not in a position to judge whether individual cases were settled appropriately.

‘Nor are we challenging the need for taxpayers’ affairs to be kept confidential. However, the sums involved in some of these cases are enormous.’

It concluded that the public needs to be assured that cases involving large sums of money are being settled correctly.

‘Equally it is unfair on HMRC staff and damaging to public confidence that the department can be the subject of repeated allegations it cannot refute, even if they are groundless.’

The Treasury Committee added: ‘We agree with the Committee of Public Accounts that HMRC should consider how the accountability and transparency of the settlement of large and complex tax cases might be improved. We are taking further evidence on how this might be achieved.’

The committee will report later in the year.

The Commons Public Accounts Committee said earlier this year that there was 'little transparency' for the taxpayer over the way tax disputes with large companies are resolved.


‘High customer satisfaction’  

Feedback on HMRC's service standards was ‘largely positive’ in relation to the Large Business Service, the Treasury Committee noted.

‘The features of the Large Business Service that appear to have led to high customer satisfaction ratings are personal contact with an individual responsible for a case and the ability of a single contact point to co-ordinate HMRC activity across departments.

‘Whilst it is not feasible for every individual or small business to have access to that level of service, these are features that HMRC should be trying to replicate as closely as possible in its contact centres through effective channels of escalation and responsibility.’

As Tax Journal reported last month, a survey conducted last year and recently posted on the HMRC website indicated that most large business ‘customers’ continue to be satisfied with the overall service provided by the department.