What IS the taxman doing? Despite outrage at big firms not paying their way the amount of uncollected tax rises to £35BILLION

  • HM Revenue and Customs under fire after failing to tackle unpaid tax
  • 7% of all tax owed still goes unpaid despite years of anger about avoidance
  • Public Accounts Committee to grill officials about failure to 'dent' figures
  • Labour says government is failing to tackle scale of tax evasion

Britain’s top tax officials are to face tough questions about their failure to make big businesses pay their way as damning new figures show £35billion-a-year goes uncollected.

HM Revenue and Customs today admitted that there is still a significant so-called ‘tax gap’, despite public outrage at avoidance schemes used by the likes of Google, Facebook and comedian Jimmy Carr.

The taxpayer lost £35billion in unpaid tax in 2011-12, a figure which has remained almost static for the past five years.

Gap: New figures show how the amount of tax owed which is not collected has barely changed since 2005

Gap: New figures show how the amount of tax owed which is not collected has barely changed since 2005

HMRC boasted that as a percentage of all taxes owed, the amount which goes uncollected has ‘fallen steadily over the last six years’.

But the Commons spending watchdog is to grill officials from HMRC in the coming weeks over the lack of significant progress in collecting tax owed to the Treasury.

Exchequer Secretary David Gauke said: ‘These figures show the tax gap is continuing to fall. The vast majority of businesses and individuals pay the taxes they owe.

‘But where they don’t it is for HMRC to challenge non-compliance fiercely, protecting money that would otherwise be lost.’

This week it emerged Facebook paid no corporation tax in Britain last year despite raking in more than £200million from its UK operations, documents reveal.

It means the internet giant has paid just £1million in corporation tax on the half a billion pounds of revenue it has made since arriving in Britain in 2007.

Fed up: Public Accounts Committee chairman Margaret Hodge said HMRC had failed to make a dent in the figures

Fed up: Public Accounts Committee chairman Margaret Hodge said HMRC had failed to make a dent in the figures

Google was accused in May this year of ‘doing evil’ by avoiding British taxes.

Starbucks also attracted criticism after it emerged last year that it had paid no UK corporation tax in the previous three years.

In January last year stand-up Jimmy Carr admitted to a ‘terrible error of judgement’ after it emerged he used the K2 scheme which enabled members to pay income tax rates as low as 1 per cent.

Ahead of the hearing Margaret Hodge, the chairman of the Public Accounts Committee, told MailOnline: ‘I don’t think they are assertive or aggressive enough.

‘I am really disappointed that, despite all the public concern expressed by hardworking people who do pay their taxes, there has not been greater success.

‘There is scepticism about how they calculate the tax gap anyway, it is a conservative estimate.

‘Only this week we had the news about Facebook and others.

‘Whilst I recognise that we have to take action internationally, it doesn’t excuse HMRC not defending the taxpayers’’ interest or their failure to make a noticeable dent in the figures.’

The value of the tax gap has increased from £32billion in 2009-10 to £35 billion in 2011-12.

The percentage tax gap has fallen very slightly from 7.3 per cent to 7 per cent over the same period.

Edward Troup, HMRC’s Tax Assurance Commissioner, said: ‘The range of non-compliance behaviours revealed by these tax gap figures underline why it is so important for HMRC to step up our wide-ranging activities against the minority who aren’t paying what’s due, whether they are SMEs, individuals, big business or organised criminals.

‘This isn’t just critical for the nation’s finances: it’s also important to protect the vast majority of honest businesses and individuals from being cheated by the unscrupulous few.’

Giants who pay a pittance

But Shabana Mahmood, Labour's shadow exchequer secretary said: 'At a time when millions are struggling with the rising cost of living and the deficit is high, it's even more vital that everyone pays their fair share of tax.

'But these figures show the government is failing to tackle tax avoidance and evasion with the value of the tax gap now up to £35 billion.

'And David Cameron is so out of touch that he's just given a £3 billion tax cut to people on over £150,000, while falling real wages mean ordinary working people are on average £1500 a year worse off.'

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