UK Treasury Loses Track of Billions of Written-off Taxes

February 8, 2012 Taxation in UK

Margaret Hodge MP Chair of the Committee of Public Accounts
A lack of communication between the Treasury and the HM Revenue and Customs has lead to discrepancies of billions of pounds in the reports prepared by the departments.

On February 7th the Public Accounts Committee of the Parliament of the UK voiced criticism at the lack of communication between the Treasury and the HM Revenue and Customs (HMRC), pointing to new evidence of inadequate data sharing amongst government departments.

The Committee’s concerns are based on new data from a recently published report, the Whole of the Government Account for 2009 – 2010, which contains the first ever compiled analysis of all government accounts.

One of the main concerns, among others, of the Committee was the fact that the Treasury was not aware of the decision of the HMRC to write off almost GBP 10.9 billion of unpaid taxes.

The PAC also claimed that there is evidence to suggest that the Treasury has no clear indication of how much the HMRC expects to collect from the total amount of unpaid taxes, which currently stands at GBP 15.7 billion.

Commenting on the report Margaret Hodge , Chair of the Committee of Public Accounts, said that “This is the first time either Treasury officials, or ministers, or MPs and the public have been able to look at the total cost of policies over time. The challenge is to improve the accuracy and extend the coverage so that there is proper transparency over the Government’s spending commitments over time… Government must then use the information to make better decisions and we will be able to judge them more effectively on value for money.”

Photo by Institute for Government