TAX chiefs faced a mauling by MPs for bending rules to do favours for big firms at a cost of millions to the taxpayer – then hiding the details from a watchdog.
Calling for senior officials to face punishment for a series of costly errors and failures, the public accounts committee warned that millions more were at risk unless procedures were tightened.
Its report called for safeguards be put in place to avoid the impression that HM Revenue and Customs enjoyed an “unduly cosy” relationship with major companies.
The MPs demanded explanations for why officials wrongly claimed they could not discuss deals with the committee and gave “imprecise, inconsistent and potentially misleading” answers.
The report represents the conclusions of a fiery public inquiry by the influential committee, that at one point saw the country’s top tax official Dave Hartnett accused by the chair of lying.
The National Audit Office has now appointed a former judge to investigate.
Mr Hartnett, who is set to retire as HMRC Permanent Secretary for Tax in the summer, has admitted an error led him to sign off on one tax avoidance dispute.
Banking giant Goldman Sachs was allowed to skip a multi-million pound interest bill on unpaid tax on bonuses after Mr Hartnett was wrongly advised there was a “legal impediment” to collecting it.
The potential cost to the taxpayer is officially put at £8m, but the committee was given evidence from a whistleblower that the sum could be as high as £20m.