HMRC Writes Off Nearly £11bn In One Year Of Unpaid Tax, Finds Public Accounts Commitee

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The Treasury was "shocked" to find that HMRC had written off up to £10.9bn in tax in a year, according to the head of the influential Commons committee.

Margaret Hodge told HuffPost UK that the Treasury was "taken aback by the figure".

The figures were revealed in the government accounts for 2009-10, scrutinised by the public accounts committee (PAC). It is the first time the government has released such figures, which took 20 months to prepare.

Giving evidence to the PAC, top treasury official Sir Nick Macpherson told MPs: "That is a lot of money, you are right to draw attention to that. I know that this committee regularly holds Her Majesty's Revenue And Customs (HMRC) to account."

Hodge, whose committee has previously criticised HMRC for "sweetheart deals" with big companies said tax had become a "key issue."

"It's the first time they've ever done this [released accounts] so we should welcome that. They've never put together everything the government spends over time.

"All the criticisms are in the context of this welcome advance. I think we were pretty taken aback by what it shows you. What one hopes is that government, the executive will now look at some of these figures and think about them before they take policy decisions for generations to come."

Hodge also called for government to include banks and Network Rail in their accounts, saying: "They should put Network Rail into the accounts. It's entirely funded by the taxpayer and they should be accountable to our scrutiny."

The figures also reveal that the government was liable for up to £15.7bn in outstanding clinical negligence claims, would need to pay up to £131.5bn in the future under PFI schemes, and had a public sector pensions liability of over £1,132bn.

MPs on the committee said they were "surprised" the Treasury didn't have a "grip" on trends such as clinical negligence.

"The Treasury now has the potential to strengthen the management of public finances if it uses the WGA to identify influences on the government’s financial position, including where it is most exposed, and uses these to better anticipate the risks that it must address. The Treasury must use this opportunity better to manage these risks," they recommended.

Emma Boon, campaigns director of the Taxpayers' Alliance said: “It’s fantastic to see even more information published showing how the Government spends taxpayers’ money. Greater transparency will make it easier for members of the public to hold the Government to account. Taxpayers have a right to know what big financial decisions mean and it should be clear what our liabilities are for things like public service pensions and PFI.”

A Treasury spokesperson said: "No other country has sought to fully consolidate all public sector bodies, including the local government sector, in one statement of accounts. We will build on this first publication and are working hard to remove any qualifications," a spokesman said.
"HMRC collects almost all tax debt and write-offs are relatively low. What's more, around 90% of those write-offs are due to insolvency where further debt pursuit is actually barred by law."

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