HM Revenue & Customs (HMRC) should be even-handed when managing tax disputes, regardless of the size of the company or tax bill involved, according to a group of MPs.
In a new report, the Treasury Committee states that HMRC should deal with big businesses in the same way as other taxpayers.
The chairman of the Treasury Committee, George Mudie MP, said: ‘Taxpayers must have confidence that HMRC is being even-handed at all times, otherwise rates of voluntary compliance with the tax code could suffer.
‘It is encouraging that HMRC has recognised that its processes for settling tax disputes were flawed and is implementing changes,’ he added.
Last year the Public Accounts Committee accused HMRC of enjoying ‘unduly cosy’ relationships with big businesses, following the revelation that there remained more than £25 billion worth of unresolved tax issues with major companies.
The MPs argued that some big companies were let off billions of pounds in tax payments because they were receiving ‘preferential treatment’ from the tax authority.
Following the critique, HMRC announced that all tax deals worth more than £100m would, in future, be handled by a senior official acting as an ‘assurance commissioner’.
The new report by the Treasury Committee puts forward a number of recommendations, including reducing the amount of time the tax authority devotes to calculating the precise size of the ‘tax gap’.
The MPs have also called on HMRC to encourage greater voluntary paying of tax by the public.