by Nick Robinson | Mar 21, 2013 | Accounting, Business, Taxation
Findings detailed in a report recently published by the National Audit Office (NAO) suggest much room for improvement in the operations of HMRC. Should even some of this improvement be realised, it could mean UK accountants having to be even more meticulous in their work. To be exact, the findings revealed that, last year, about £5.2bn in taxes were written off by HM Revenue & Customs.
Though this figure fell below that of the £5.5bn of tax write-offs and remittances made by HMRC during 2010/11, it still comprised of more than 1% of the total amount of tax – £474.2bn – collected. Indeed, the NAO report revealed many errors made by HMRC last year, including overpaying about £2-£2.5bn in tax credits and underpaying about £290m due to fraud and error. This saw the department fail in its target of lowering the level of fraud and error to 5% of tax credit entitlements.
Though UK accountants may have reaped benefits for their clients from such errors by HMRC, Margaret Hodge, chair of the committee of public accounts, despaired at the “sheer scale of waste and mismanagement at HMRC”, adding that “it is no surprise that the NAO has found substantial problems with the HMRC’s accounts. This year has seen a litany of tax errors and scandals come to light with mistakes made at the most senior level from the permanent secretary for tax downwards.”