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HMRC 'loses its nerve' over big firm tax-avoiders

Tax authorities have been holding back on using sanctions against multinational companies, while pursuing small businesses and individuals, according to a new parliamentary report.

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Tax authority 'seeks to collect all that is due'

HM Revenue and Customs has defended its recorded in the wake of a parliamentary report that has accused it of holding back on using sanctions against multinational companies, while pursuing small businesses and individuals.

Read: Tax authority 'fails to collect £35b' from big businesses

HMRC seeks to collect the tax that is due from all taxpayers, so that everyone pays their fair share in accordance with the tax laws passed by Parliament.

We have secured more than £50 billion of additional tax from our compliance work since 2010, including £23 billion from large businesses.

We have carried out 2,345 prosecutions for tax evasion in the last three years, including of high-profile accountants and lawyers, have halved the number of disclosed tax avoidance schemes and have protected more than £2.4 billion from marketed tax avoidance schemes this year alone.

– HMRC spokesman

Watch: Government 'not pursuing tax avoidance' with big firms

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Tax authority 'fails to collect £35bn' from big businesses

The "tax gap" between the amount owed to the Exchequer and the amount actually collected grew by £1 billion to £35 billion in 2011/12, according to a new parliamentary report that accuses HM Revenue and Customs of being soft on big multinational firms.

HMRC holds back from using the full range of sanctions at its disposal. It pursues tax owed by the smaller businesses but seems to lose its nerve when it comes to mounting prosecutions against multinational corporations.

It predicted that it would collect £3.12 billion unpaid tax from UK holders of Swiss bank accounts... but in 2013-14 it has so far secured just £440 million.

We were astonished that HMRC could not give any reasons for such a shortfall.

– Margaret Hodge, Chair of the Commons Public Accounts Committee

Read: Tax authorities 'hold back' on big firms, report finds

Tax authorities 'hold back' on big firms, report finds

HM Revenue and Customs seems to "lose its nerve" when faced with the prospect of taking legal action against global giants, while pursuing small businesses and individuals, according to a new parliamentary report.

Tax authorities have been holding back on using sanctions against multinational companies, according to a new parliamentary report. Credit: PA

HMRC has fallen short on the unpaid tax it hoped to extract from Swiss bank accounts - collecting just £440 million so far this financial year, rather than the £3.12 billion forecast after a bilateral agreement - said the House of Commons Public Accounts Committee.

Changes in "controlled foreign company" rules and the failure to close a loophole relating to Eurobonds have made it "easier for the companies to avoid tax while ordinary people continue to pay their share," said the committee's chairwoman Margaret Hodge.

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