Taxman accused of fearing Hodge
HM Revenue & Customs has denied claims that it is struggling with a “backlog” of tax avoidance cases, despite admitting it has more than 40,000 of them on its books, it emerged over the weekend.
Featured in an article by the Daily Telegraph on Saturday, an HMRC spokesman said a total of 41,000 enquiries into businesses or individuals suspected of avoiding tax were currently “being worked on.”
The article attributed the “huge” volume of avoidance cases to Revenue officials being too concerned about political consequences to offer people or firms settlements or agreements for the avoided tax.
Law firm Pinsent Masons reportedly dubs this “the Margaret Hodge effect,” seemingly in light of the grilling which the Public Accounts Committee chair has given to HMRC staff accused of offering ‘sweetheart deals’ to corporations.
“The Margaret Hodge effect is a fear that stops HMRC doing deals,” the firm’s tax disputes partner Ian Hyde told the newspaper. “No one wants to be the tax officer who did another Goldman Sachs deal.”
The article alleges that firms or individuals accused of tax avoidance face “growing delays” or being “left in limbo,” due to the sheer number of cases and HMRC’s apparent refusal to adopt a practical approach in the shape of a settlement.
Cited by the paper, the Revenue spokesman said that the cases would be “resolved through the avoider paying up or the case going to court.” He also reportedly denied there was a backlog or the department was under-resourced.