HMRC hasn’t prosecuted a single company for enabling tax evasion in six years,
a new investigation found this week.The tax authority was given criminal enforcement powers in 2017 to prosecute companies that help people to evade tax.
At the time, then prime minister David Cameron said that these new powers would “send a clear message to the corrupt that there is no home for them here”. Yet they have never been used.
This casts serious doubts over whether HMRC is preventing and deterring corporate tax avoidance.
So what has led to HMRC being so toothless?
Outgunned and outmaneuvered
As I told The Observer , HMRC is routinely outgunned by the private sector. They simply don’t have the resources to prosecute rich and powerful corporate players.
Criminal prosecutions, especially against big corporate legal teams, take time and money. Yet HMRC is chronically underfunded and understaffed.
As we reported last year, a Parliamentary committee slammed the government for underfunding HMRC.
They estimated that £42 billion could be missing in unpaid tax. And that for every £1 invested in HMRC investigations, £18 was recovered in additional tax.
The government should give HRMC the resources it needs to pursue tax evaders. The new revelations, based on research by the Bureau of Investigative Journalism and TaxWatch, will only increase pressure on them to do so.