20/12/2011 02:29 GMT | Updated 20/12/2011 05:20 GMT

Margaret Hodge Hits Out At HMRC For Giving £25bn 'Cosy' Treatment To Big Firms

HMRC are giving "cosy", preferential treatment to larger companies while putting public money at risk, an influential committee of MPs have warned.

The Public Accounts Committee (PAC) highlighted "serious concerns" about how HMRC handles large tax settlements, saying there is no evidence of a "culture of accountability" within the department in a report published on Tuesday.

MPs also said HMRC appeared to give "favourable" treatment to big firms, with commmittee chair Margaret Hodge saying there were "legitimate concerns" they were "being treated more favourably than ordinary taxpayers, whether they be small businesses or hard-working families."

"In one instance, a mistake led to a potential £20 million of interest on a tax liability not being collected. Parliament and the public must be assured that settlements do not short-change the Exchequer," she claimed.

Over £25 billion in public money is still owed to the tax payer. HMRC's head Dave Harnett, who is to retire at the end of the summer, was accused by the committee of failing to collect £10m interest on a tax bill from Goldman Sachs.

But HMRC have rejected the PAC's conclusions, saying their report is based on " partial information, inaccurate opinion and some misunderstanding of facts".

A spokesperson said it was incorrect officials had not cooperated with MPs, stressing: “Senior HMRC officials sought to be co-operative by providing as much information as possible within the legal constraints of taxpayer confidentiality under which they work.

"Taxpayer confidentiality is a legal requirement, fundamental to tax administration in the UK and across the world. Parliamentary scrutiny is delivered via the NAO to whom HMRC provide unfettered access to all their papers.”

And in response to claims HMRC departed from "normal governance procedures" during some deals, the spokesperson said they were taking action on specific cases.

"We have also written to the Committee with proposals to further strengthen our internal governance.

"These further changes will be agreed with our new Chief Executive in the New Year.

The department have a prickly history with PAC, after the committee forced HMRC's top lawyer to swear on the bible before giving evidence to MPs.

Labour seized on the report, saying it showed the government had "stood by" while HMRC cut deals with Goldman Sachs.

"George Osborne should be instructing HMRC to come clean on the details of these deals and opening up to proper scrutiny the tax settlements in question.

"Big business must pay its fair share of taxation and HMRC must operate a level playing field for all tax-payer," MP Owen Smith said.