Source · Select Committees · Public Accounts Committee
Recommendation 27
27
Phoenix companies are not the only type of rogue company HMRC takes action against.
Conclusion
Phoenix companies are not the only type of rogue company HMRC takes action against. It also told us about its work to prevent criminals impersonating HMRC to defraud members of the public. HMRC said it was previously one of the most impersonated organisations, but its recent work in this area means it is no longer in the top 100. It worked with authorities in India to close a call centre making fraudulent claims but noted that this success is likely to have a temporary effect and that it will need to continue work in this area.67 58 Qq 32, 76; C&AG’s Report, para 2.29 59 C&AG’s Report, para 2.29 60 Qq 32, 76; C&AG’s Report, para 2.31 61 Q 79; C&AG’s Report, para 2.29, 2.31, 2.32 62 Qq 32, 76 63 Q 32 64 Qq 32, 76; C&AG’s Report, para 2.30 65 Qq 76, 78–80 66 Q 76 67 Qq 69–71 18 HMRC’s management of tax debt
Government Response
Not Addressed
HM Government
Not Addressed
3b: HMRC should be prepared to bring the full force of the law to bear on those who defraud the Exchequer, and report publicly and regularly to Parliament on the numbers prosecuted. 3.6 The government agrees with the Committee’s recommendation. Target implementation date: April 2023 3.7 The COVID support schemes have helped millions of people and businesses through the pandemic. While most people have claimed the right amount, and many overclaims are the result of error rather than fraud, HMRC are alert to the potential increase in risk due to businesses carrying relatively large levels of debt from the pandemic, so where the abuse happens the losses from each case are expected to be higher. HMRC uses specialist compliance officers to address the risk posed by insolvency as well as tackling those that set out to deliberately abuse the COVID support schemes 3.8 HMRC is always prepared to bring the full force of the law to bear where appropriate. HMRC has a policy that sets out the circumstances in which its criminal powers are deployed, but also has a wide range of civil powers to tackle deliberate non-compliance including the ability to make individual company officers responsible for corporate debts where there has been deliberate, repeated behaviour to use insolvency proceedings as a way to avoid paying money owed. 3.9 HMRC also collaborates with The Insolvency Service, ensuring a robust approach to taking action against non-compliant directors, and those who abuse the insolvency regime. 3.10 HMRC is not a prosecuting authority. It carries out criminal investigations which are passed to prosecutors (eg the Crown Prosecution Service) to decide whether or not to charge with a criminal offence. 3.11 As part of its commitment to increase transparency, HMRC will explore options to publish information about its performance on responding to those involved in phoenixism. 3.12 Alongside this Treasury Minute response, HMRC has written to the Committee providing a substantive update on recommendation 3a and 3b.