MPs from the Public Accounts Committee (PAC) have demanded that HMRC take action to address poor performance and "unacceptable" service standards.
While HMRC collected a record-breaking £731.1 billion in taxes and duties in 2021/22, £42 billion is still owed in unpaid tax. Furthermore, the tax authority only expects to recover around £4.5 billion lost to fraud and error in its Covid-19 support schemes.
Because of this, the PAC criticised HMRC's approach to compliance, saying that more must be done to clamp down on outstanding tax debt.
According to the Chartered Institute of Taxation (CIOT), accountants and tax advisors have also been reporting delays to getting answers from HMRC for months.
Susan Ball, president of the CIOT, says that the poor levels of service can be partly attributed to a reduction in customer service staff employed by HMRC, as well as fewer payslips and payment reminders being issued than in previous years.
PAC chair, Dame Meg Millier MP, said:
"The eye-watering £42 billion now owed to HMRC in unpaid taxes would have filled a lot of this year's infamous public spending black hole.
"We recognise the problems HMRC faces - due to poor controls, the horse has bolted - but we believe there is a moral duty to pursue fraud."
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