9th Report - Tax evasion in the retail sector

Select Committee
Public Accounts Committee HC 355 12 February 2025
Report Status Government responded
Conclusions & Recommendations 27 items (10 recs)
Source View on Parliament website
Government Response (AI assessment · 26 of 27 classified)
Accepted 14
Accepted in Part 1
Acknowledged 9
Deferred 1
Rejected 1
Government response
Treasury minutes: Government response to the Committee of Public Accounts on the Ninth report from Session 2024-25 · published 6 May 2025
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Recommendations & Conclusions

9 results
10 Conclusion Acknowledged
HMRC lacks a specific strategy solely focused on tackling tax evasion.
Conclusion
HMRC does not have a specific strategy for addressing tax evasion.23 In 2019 HMRC set its latest strategy to tackle tax non–compliance, which is built of three strands: promoting compliance through education and support; preventing non–compliance by improving policies and … Read more
Government Response Summary
The government agrees with the committee's recommendation and states that HMRC is looking into a specific strategy for evasion as it might consider a specific strategy for a behaviour if that behaviour requires a particular type of response.
HM Treasury
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11 Conclusion Acknowledged
HMRC considering developing a specific strategy for tax evasion, but none currently exists.
Conclusion
HMRC told us it has some separate and specific strategic approaches to particular types of non–compliance, such as serious fraud and illicit tobacco, but not for tax evasion.26 It told us that evasion is just one element of the tax … Read more
Government Response Summary
The government agrees with the committee's recommendation and states that HMRC is looking into a specific strategy for evasion as it might consider a specific strategy for a behaviour if that behaviour requires a particular type of response.
HM Treasury
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12 Conclusion Acknowledged
Government investment enables HMRC to reduce the overall tax gap, including evasion.
Conclusion
Previously HMRC had an overall aim to stop the tax gap increasing.29 HMRC told us that it now wants to reduce the tax gap.30 At Autumn Budget 2024, the government increased HMRC’s settlement for 2025–26 by 4.5% in real terms … Read more
Government Response Summary
The government agrees with the committee's recommendation and states that HMRC wants to reduce the tax gap and highlights investments to increase compliance staff.
HM Treasury
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13 Recommendation Acknowledged
HMRC lacks specific objectives or targets for tackling tax evasion rates.
Recommendation
HMRC does not have a specific focus on, or explicit objective for, its performance in tackling tax evasion.33 HMRC explained that it is driven by an overall compliance yield target which is designed to close the overall tax gap, but … Read more
Government Response Summary
HMRC will increase its budget by £762 million for 2025-26 to boost compliance and customer service capacity, including investing in IT systems, data and tax practitioners.
HM Treasury
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15 Recommendation Acknowledged
HMRC, Companies House, and Insolvency Service commit to increasing collaboration to tackle phoenixism.
Recommendation
At Autumn Budget 2024, the government announced that it was increasing collaboration between HMRC, Companies House and the Insolvency Service to tackle phoenixism.40 The Insolvency Service told us that, since the publication of the National Audit Office’s report, it had … Read more
Government Response Summary
HMRC will develop a concrete plan to increase collaboration between HMRC, Companies House and the Insolvency Service to tackle phoenixism and will write to the Committee within 6 months to set out its plan.
HM Treasury
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16 Recommendation Acknowledged
HMRC and Companies House system integration for joint registration faces significant long-term challenges.
Recommendation
HMRC and Companies House have explored opportunities from Companies House’s new powers, including a single streamlined system for registering and filing company, Corporation Tax and VAT documentation which would provide more assurance over the addresses of registered businesses. HMRC and … Read more
Government Response Summary
HMRC will write to the Committee in 6 months to update them on plans and progress regarding closer cooperation on company registrations and de-registrations, accounting and filing, as well as sharing risk intelligence and data.
HM Treasury
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17 Conclusion Acknowledged
Limited historic Companies House powers enabled widespread fraudulent abuse of the UK company register.
Conclusion
Until April 2024, Companies House had limited powers to check the validity of information provided to it by registered companies. It also had limited enforcement and intelligence–gathering powers, and limited scope to share data with other public bodies. The lack … Read more
Government Response Summary
The government accepts the case for exploring options to improve the authenticity and integrity of company address information on the register and DBT and Companies House will report to the Committee on progress in November 2025.
HM Treasury
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19 Conclusion Acknowledged
Full ECCTA operationalisation, particularly mandatory director identity verification, requires further system development and legislation.
Conclusion
Some measures introduced under ECCTA will not be fully operational until Companies House develops the necessary systems and capability, or until further secondary legislation is in place. This includes verifying directors’ identities.53 Companies House told us identity verification will be … Read more
Government Response Summary
The government accepts the case for exploring options to improve the authenticity and integrity of company address information on the register and DBT and Companies House will report to the Committee on progress in November 2025.
HM Treasury
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20 Conclusion Acknowledged
Companies House lacks legal powers for business address verification, hindering fraud tackling.
Conclusion
The identity checks that Companies House is now responsible for are not intended to verify the address or place of business.57 Companies House told us that address verification, which it says would be an additional burden on businesses, is not … Read more
Government Response Summary
The government accepts the case for exploring options to improve the authenticity and integrity of company address information on the register and DBT and Companies House will report to the Committee on progress in November 2025.
HM Treasury
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