HMRC criticised over £10.2bn backlog of 41,000 avoidance cases

The National Audit Office (NAO) has criticised HM Revenue & Customs (HMRC) over a backlog of 41,000 avoidance cases it is investigating relating to £10.2 billion of tax.

The NAO said in a report on HMRC's efforts to tackle tax avoidance had not demonstrated how it would tackle this backlog, and that its tax avoidance disclosure regime was failing to curb the ‘persistent’ use of highly contrived schemes.

‘HMRC must push harder to find an effective way to tackle the promoters and users of the most aggressive tax avoidance schemes,’ said NAO head Amyas Morse.

‘Though its disclosure regime has helped to change the market, it has had little impact on the persistent use of highly contrived schemes which deprives the public purse of billions of pounds,’ he added.

‘It is inherently difficult to stop tax avoidance as it is not illegal. But HMRC needs to demonstrate how it is going to reduce the 41,000 avoidance cases it currently has open.’