UK Inquiry Tracker

Tax evasion in the retail sector

Public Accounts Committee Closed Inquiry

Opened: 31 Oct 2024 Closed: 3 Apr 2025 Parliament page

HMRC estimates that £5.5bn of tax was lost due to evasion in 2022-23. This is equivalent to 0.7% of total theoretical tax liabilities, and is most prevalent among small businesses. Of these estimated evasion losses, 81% come from small businesses including companies, partnerships and sole traders. This has risen from … Read more HMRC estimates that £5.5bn of tax was lost due to evasion in 2022-23. This is equivalent to 0.7% of total theoretical tax liabilities, and is most prevalent among small businesses. Of these estimated evasion losses, 81% come from small businesses including companies, partnerships and sole traders. This has risen from 66% of losses in 2019-20. These losses prevent a level playing field between businesses by giving evaders an unfair competitive advantage, and deprive the public purse of its revenue. The National Audit Office (NAO) reported in 2024 that tax evaders can easily exploit government systems. Significant weaknesses remain around making fraudulent company registrations more difficult, with gaps in checks around online retailers. VAT non-compliance by overseas retailers selling goods and services online resulted in estimated losses of around £700m, according to the report, of which around £300m was deliberate evasion. The Committee has long scrutinised HMRC’s work to tackle tax non-compliance, evasion and fraud. The Committee warned in 2017 that British businesses were being hit hard by illegal tax practices in its report on tackling online VAT fraud and error , while its report on managing tax compliance following the pandemic called on the tax authority to ensure for it never to be easier to cheat the tax system than to comply with it. Based on the 2024 NAO report, the Committee will hear from senior HMRC and Treasury officials on subjects including: - HMRC’s strategy to tackle tax evasion in retail; - Reducing risks of tax evasion; and - How effectively HMRC responds to different methods of tax evasion in retail. Please note the Committee is unable to assist with individual cases. Please look at the requirements for written evidence submissions and note that the Committee cannot accept material as evidence that is published elsewhere. If you have evidence on these issues please submit it here by 23:59 on Thursday 05 December 2024. Show less

10 Recommendations

17 Conclusions

1 Report

1 Oral session

4 Letters

1 Event

Activity timeline 8 events

6 May
2025

Report published

Treasury minutes: Government response to the Committee of Public Accounts on the Ninth report from Session 2024-25

12 Feb
2025

Report published

9th Report - Tax evasion in the retail sector

27 Jan
2025

Correspondence

Letter from the Chief Executive and First Permanent Secretary of HM Revenue and Customs relating to the oral evidence session held on 16 De…

17 Dec
2024

Correspondence

Letter from the Registrar of Companies at Companies House relating to the briefing on the inquiry into Tax evasion in the retail sector, 13…

17 Dec
2024

Correspondence

Letter to the First Permanent Secretary and Chief Executive of HM Revenue and Customs relating to the Accounting Officer Assessments for th…

16 Dec
2024

Oral evidence

Oral evidence session

16 Dec
2024

Correspondence

Letter to the Chief Executive and Registrar of Companies at Companies House relating to the inquiry into Tax evasion in the retail sector, …

16 Dec
2024

Formal meeting (oral evidence session) · Room 8, Palace of Westminster

Committee event

Oral evidence sessions 1 session

16 Dec 2024

View on parliament.uk

Dean Beale · The Insolvency Service Louise Smyth · Companies House Penny Ciniewicz · HMRC Sir Jim Harra · HMRC

Reports 1 report · click to expand

Title	HC No.	Published	Items	Response
9th Report - Tax evasion in the retail sector	HC 355	12 Feb 2025	27	Responded

Recommendations & Conclusions

1 result

24 Recommendation Deferred

9th Report - Tax evasion in the re…

HMRC has not formally assessed transaction-based reporting, despite its acknowledged compliance benefits.

HMRC has not pursued some controls used in other countries, including ‘transaction–based reporting’ where businesses are required to regularly report all sales and purchases to the tax authority, giving up to date information on the VAT owed.71 We asked HMRC … Read more

Government Response

HMRC will explore the viability and effectiveness of additional controls which could reduce the risk posed by tax evasion and they are consulting on e-invoicing, with further development contingent on the outcome of this consultation which closes on 7 May.

HM Treasury

View details

Government Response AI assessment · 25 of 10 classified

Accepted 14

Accepted in Part 1

Acknowledged 9

Deferred 1

Total 10 recs + 17 conclusions

Correspondence 4 letters

27 Jan 2025 To committee Letter from the Chief Executive and First Permanent Secretary of HM Revenue and Customs relating to the oral evidence session held on 16 December 2024 on Tax evasion in the retail sector, 10 January 2025

Parliament page

17 Dec 2024 To committee Letter from the Registrar of Companies at Companies House relating to the briefing on the inquiry into Tax evasion in the retail sector, 13 December 2024

Parliament page

17 Dec 2024 From committee Letter to the First Permanent Secretary and Chief Executive of HM Revenue and Customs relating to the Accounting Officer Assessments for the Making Tax Digital Programme and the Locations Programme, 12 December 2024

Parliament page

16 Dec 2024 From committee Letter to the Chief Executive and Registrar of Companies at Companies House relating to the inquiry into Tax evasion in the retail sector, 12 December 2024

Parliament page