An Aberdeen MP has criticised the UK Government for failing to tackle tax evasion.
Aberdeen South MP Stephen Flynn made the comments following the publication of the Public Accounts Committee’s latest report on the work of HM Revenue and Customs (HMRC).
The report, called Tackling the Tax Gap, examines HMRC’s most recent estimate of the difference between the amount of tax owed, and the amount that was paid in 2018/19 – which was £31 billion.
It adds: “Early indications show compliance yield in the first quarter of 2020–21 is only half the amount HMRC reported in the same period last year.
“Understandably, HMRC has carried out fewer investigations since the lockdown began in March, as it had to prioritise the implementation of the COVID-19 support schemes and be responsive to the needs of taxpayers struggling with the impacts of the pandemic.”
The SNP MP, who is also Shadow Financial Secretary to the Treasury, said there was “no excuse” for the failure of the Government to provide financial support to millions of people throughout Covid-19 while it has not been tackling tax evasion.
The SNP has been calling for the UK Government to bring in a comprehensive financial package for those who fall through the gaps of support currently available.
It also hopes more robust action will be taken to tackle tax evasion.
Mr Flynn said: “Even under the full furlough scheme it’s been estimated that around three million workers have received no support other than being told to apply for benefits.
“Thousands are facing or have been plunged into debt and financial hardship, with many struggling to put food on the table or heat their homes because they have fallen through the gaps in available support. Yet, HMRC is failing miserably to tackle tax evasion – money which could be used to support those in need.
“Rishi Sunak promised to do what it takes to support everyone – that includes helping the three million who have fallen through the gaps as well as doing all he can to tackle tax evasion.
“I’ve been contacted by a number of self-employed and small business owners who have been left out of support packages. At the beginning of the pandemic, we were told by the Tory government there wasn’t enough time to design a financial support system for them – this excuse no longer holds up.
“Our recovery from the economic damage caused by coronavirus will depend on a diverse and thriving small business sector. There’s no excuse for deliberately excluding so many hard-working small business owners from the support they need.
“If the UK government won’t take the necessary action then it must devolve the fiscal powers to Scotland so we can get the job done. The SNP Scottish Government have done all they can to support people and businesses in Scotland, but without borrowing powers they are continually fighting for our economy and people’s livelihoods with one hand tied behind their backs.”
A Treasury spokeswoman said: “Since 2010, the government has introduced over 100 measures to tackle tax avoidance, evasion, and other forms of non-compliance, that secured and protected over £220 billion that would otherwise have gone unpaid, meaning the difference between the tax which should be collected and what is actually collected is at a record low (an estimated 4.7% of total tax liabilities).
“Together with the prudent management of the public finances over the past decade, that has meant that the UK Government has been able to provide billions of pounds of support both to the Scottish Government and directly to Scottish businesses and workers to deal with the pandemic.
“We have given the Scottish Government an additional £7.2 billion to cope with the pressures of the pandemic, and are supporting nearly half a million jobs in Scotland through the furlough scheme.”