“It is a persistent finding of my Committee that HMRC is nowhere near tough enough in cracking down on avoidance and closing loopholes. In this case they appear to have been particularly feeble.”The specific case that she was referring to relates to a tax exemption relating to certain high interest loans, whereby the interest element is used to reduce corporation tax. This allowance or "loophole" (as per Ms Hodge) was established in the 1980's, in order to make Britain more internationally competitive.
It is estimated that this may cost the government around £500M per annum and, as such, there has been pressure to end the allowance/close the "loophole".
However, as a result of lobbying the government has chosen to continue to allow the exemption/"loophole" to remain.
Make of that what you will.
However, to call HMRC "feeble" over a government decision is simply wrong and misleading!
Tax does have to be taxing.
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