MPs to grill HMRC officials over lost tax revenues of £35bn

Three senior officials from HM Revenue and Customs are to appear before a parliamentary committee today to answer questions over its £35bn estimate of lost tax revenues.

MPs on the public accounts committee, chaired by Margaret Hodge, are expected to ask why the tax policies of multinationals including Google, Starbucks and Amazon do not appear in the official tax avoidance figures.

HMRC said that just £4bn of revenue was lost through tax avoidance, and other factors were more costly, including £5.1bn lost to tax evasion, £5.4bn to the hidden economy, and £4.3bn to companies and individuals failing to take reasonable care.

David Cameron and George Osborne have previously described some elements of what is included in the overall tax gap as tax abuse.

MPs have criticised HMRC for getting too close to big business and for failing to crackdown on abuses in the complex systems.

The parliamentary committee is expected to ask why a harder line is not being taken on large multinational groups, particularly technology companies with sprawling global tax structures.

Energy groups have also been accused of exploiting tax havens to qualify for UK tax breaks. Ministers failed to close down loopholes in this area after a consultation with HMRC last year.

According to the Guardian, Chris Leslie, shadow chief secretary to the Treasury, said yesterday: “David Cameron needs to explain why he decided not to close down this tax loophole, which we know some energy companies are using to avoid millions in tax.”

In recent months other European countries, following the lead from France, have conducted raids of multinational’s offices, including corporations such as LinkedIn, Google and Microsoft.

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