HMRC Myths Busted!

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April 26th 2024
Tax Week 3
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HMRC Myths Busted!

HMRC 'mythbusts' common misconceptions about the UK's tax collector.

In response to inaccurate claims about HM Revenue & Customs floating about, the Taxman has taken to releasing a press release directly addressing the most common stories it seeks to clarify.

    No 'sweetheart deals'

    There are no special deals or discounts made when collecting tax, regardless of the size of the entity or amount of tax owed. From multinationals to an individual self assessment, HMRC state the official tax rulebook is used for all.

    They go on to state, if a tax collection amount is disputed, the process to argue the amount is the same legal process for individuals through to businesses and large global giants.

    If a lower amount of tax is collected than originally deemed it will only be based on what is deemed in any final court tribunal - with the National Audit Office (NAO) keeping an eye on settlements to make sure they are fair and reasonable for all taxpayers.

    All taxpayers must pay what is owed.

    Of the 2,000 largest businesses in the UK, around half are under investigation by the Taxman at any point in time - compared to 10 percent of smaller businesses.

    HMRC chases larger companies more so than smaller ones due to the ability for larger entities to attempt to sidestep tax compliance through loopholes and legal interpretations. In the 20/21 tax year, large business investigations brought in an extra £13.2 billion in previously under or unpaid taxes.

    HMRC makes claim to their world-class low tax gap, with 97.5 percent of tax due collected.

    HMRC did all it could to tackle fraud and error in pandemic support schemes

    Recent headlines have shown the billions written off (£5.8 billion) by the Chancellor due to fraud in the various pandemic financial support schemes, from loans to furlough to eat out to help out.

    HMRC's response states a number of measures were in place to protect public money when making financial support available to claimants. A total of £81.2 billion was handed out through various schemes with the £5.8 billion fraud/error cost equating to a 7 percent loss - a percentage HMRC says is in line with what was planned/expected at the outset.

    There was 8.7 percent fraud/error rate in the furlough scheme, 2.5 percent fraud/error rate in the SEISS schemes, and 8.5 percent fraud/error rate in the Eat Out to Help Out scheme.

    There are over 1,000 staff specifically working to combat fraud in these schemes at a cost of £100 million - with expected recovery of £0.8 to £1 billion by 2023.

    HMRC customer service is good despite working from home

    Since March 2020 at the very start of the pandemic, staff at HMRC have been transtitioned to working from home. The latest stats show customer service has improved with call wait times reduced by 4 minutes on average with a return to pre-pandemic support levels on track.

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