Taxman rapped over deals with firms
Tax chiefs are facing a mauling by MPs for bending rules to do favours for big firms at a cost of millions to the taxpayer then hiding the details from a watchdog.
Calling for senior officials to face punishment for a series of costly errors and failures, the Public Accounts Committee (PAC) warned millions more were at risk unless procedures were tightened.
Its report called for safeguards to be put in place to avoid the impression that HM Revenue and Customs (HMRC) enjoyed an "unduly cosy" relationship with major companies.
And the MPs demanded explanations of why officials wrongly claimed they could not discuss deals with the committee and gave "imprecise, inconsistent and potentially misleading" answers.
Prime Minister David Cameron's official spokesman denied that big corporations receive preferential treatment from the taxman.
The spokesman said: "HMRC treats all taxpayers even-handedly. They support the majority of taxpayers who want to pay their taxes so that they can comply with tax law, and they crack down hard on people who seek to evade tax or avoid tax.
"They collected a record amount of tax last year - £468 billion of taxes. They have been developing over a period of time a new approach to dealing with large corporate taxpayers, and that approach has resulted in additional revenues coming in. It is an approach that has been adopted and copied by other tax authorities around the world - this is the approach the US now use - and it has been praised by international organisations such as the OECD (Organisation for Economic Co-operation and Development)."
HMRC flatly rejected the committee's conclusion that there were systemic failures in its management of tax disputes.
Emma Boon, campaign director of the TaxPayers' Alliance lobby group, said: "This report again calls into question whether HMRC is fit for purpose. Ordinary taxpayers often feel that they are treated harshly when they make genuine mistakes because of our complicated tax system; the PAC findings will increase suspicions that big businesses are treated differently.
"The taxman will always struggle to effectively enforce a tax code that is one of the longest and most complicated in the world and the only way to ensure that more individuals and big businesses pay their fair share is to simplify the system and reduce the number of loopholes."