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Tax authority 'fails to collect £35bn' from big businesses

The "tax gap" between the amount owed to the Exchequer and the amount actually collected grew by £1 billion to £35 billion in 2011/12, according to a new parliamentary report that accuses HM Revenue and Customs of being soft on big multinational firms.

HMRC holds back from using the full range of sanctions at its disposal. It pursues tax owed by the smaller businesses but seems to lose its nerve when it comes to mounting prosecutions against multinational corporations.

It predicted that it would collect £3.12 billion unpaid tax from UK holders of Swiss bank accounts... but in 2013-14 it has so far secured just £440 million.

We were astonished that HMRC could not give any reasons for such a shortfall.

– Margaret Hodge, Chair of the Commons Public Accounts Committee

Read: Tax authorities 'hold back' on big firms, report finds

Tax authorities 'hold back' on big firms, report finds

HM Revenue and Customs seems to "lose its nerve" when faced with the prospect of taking legal action against global giants, while pursuing small businesses and individuals, according to a new parliamentary report.

Tax authorities have been holding back on using sanctions against multinational companies, according to a new parliamentary report. Credit: PA

HMRC has fallen short on the unpaid tax it hoped to extract from Swiss bank accounts - collecting just £440 million so far this financial year, rather than the £3.12 billion forecast after a bilateral agreement - said the House of Commons Public Accounts Committee.

Changes in "controlled foreign company" rules and the failure to close a loophole relating to Eurobonds have made it "easier for the companies to avoid tax while ordinary people continue to pay their share," said the committee's chairwoman Margaret Hodge.

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Higher rate calls: departments 'don't monitor revenues'

Central government departments "do not have a clear idea" of how much their services benefit from higher rate numbers, according to a report by the National Audit Office.

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Callers to central government departments spent £56 million on calls last year. Credit: PA

Although none of the departments reviewed keeps revenue directly from higher rate lines, many of them receive deductions in the cost of other services instead.

But the report said departments don't monitor the revenues that the third party providers receive, despite guidance from the Cabinet Office.

The report said: "In some cases departments have foregone revenue without being able to demonstrate a corresponding benefit either to callers or departments themselves."

Premium government calls: how much do they cost?

Government services have been found to be using premium rate lines for most of the calls they receive, costing callers an estimated £56 million last year.

But how much are you likely to be charged for a phone call to a public service?

Almost two-thirds (63%) of calls are made to 0844/0845 numbers, known as higher rate numbers, which are generally not included in mobile phone packages.

  • 0844 numbers have an average cost per minute of 5.6p from landlines and 17.1p from mobiles.
  • 0845 numbers cost on average 4.2p per minute from landlines and 17.6p from mobiles.

A further 15% of calls to government services are made to so-called Freephone numbers, which start with the prefix 080. Again, these are also not usually included within 'free minutes'.

  • Freephone numbers are indeed free from landlines.
  • But from mobiles they cost an average of 16.2p per minute.

Government 'making progress' on higher rate calls

The Government has admitted that high charges for public service phone calls are "inappropriate", but says it is making progress towards fixing the issue.

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The Government's Digital by Default agenda aims to ensure services are improved by going digital. Credit: PA

A Government spokesperson said: "We agree that it is inappropriate for vulnerable people to pay high charges for accessing vital public services and we are clear that a more consistent approach is needed.

"The Cabinet Office now runs a cross-departmental group to consider customer telephone lines. This group has made good progress in drafting guidance on prefix number selection and establishing best practice."

The spokesperson also said growing use of digital alternatives were helping reduce the problem: "We are transforming a first wave of 25 exemplar services, to be digital by 2015."

Higher rate Government calls 'take too long to answer'

The Public Accounts Committee has said calls to government services, including those charged at premium rates, take "too long to answer".

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Government service call waiting times have been criticised as well as their costs. Credit: PA

In its report on the number of premium lines used by public services, the committee said across the first quarter of 2013/14 average call waits at HM Revenue and Customs were seven minutes.

Chairperson Margaret Hodge said: "The industry benchmark is to answer 80% of calls in 20 seconds but most departments do not have such a target and their performance falls wide of accepted industry standards.

"Performance by departments varies but is often astonishingly bad.

"HMRC managed to answer only 16% of the calls it received on its tax credits helpline on the deadline day for notifying the department of changes of circumstances."

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Government 0845 numbers 'unacceptable'

The chairperson of the the Public Accounts Committee has said customers of Government services should be able to contact them easily and cheaply.

Margaret Hodge
Margaret Hodge said callers to Government services must be informed of the costs involved. Credit: PA

Margaret Hodge said: "Charging customers higher rates by making them use 0845 or other high rate numbers is not acceptable, especially when the customers are often vulnerable people.

"We found that one third of customer telephone lines across Central Government used higher rate numbers. Half of those lines serve the poorest people."

Higher rate lines include those run by the Department for Work and Pensions, helplines for victim support and the Bereavement Service and the inquiries and complaints line of the Student Loans Company.

Government helpline calls charged at premium rate

More than half of all calls by the public to central Government departments are charged at a premium rate, a report has revealed.

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One third of government lines were found to be premium lines. Credit: PA

Published by the Public Accounts Committee, the report shows that over 100 million calls - 63% of all calls to central Government services - were made to higher rate numbers in 2012/13.

The estimated total public cost to those calling premium Government numbers was £56 million in that year.

No 10: 'Everyone has to take responsibility' on policies

David Cameron's official spokesman sidestepped repeated questions from reporters whether the Prime Minister was "confident" that Universal Credit would be delivered on time and on budget.

He said: "The department is working to the 2017 timetable. That is the timetable that the department continues to work to."

Pressed on whether it was right for ministers, rather than senior officials, to take responsibility for failings in implementing major policies, the No 10 spokesman said the Prime Minister had previously insisted that "everyone has to take their responsibility."

Read more: Cabinet minister denies blaming officials for benefit reform failings

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