Negotiations between HMRC and corporations should be scrutinised by MPs through a powerful new parliamentary committee, according to former Public Accounts Committee chair Margaret Hodge.
Hodge is known for her vocal criticism of tax settlements that see large companies pay less tax than their profits suggest they should pay.
During her time leading the PAC, the committee attempted to understand how these settlements had been agreed, but HMRC regularly said it could not disclose details as this would be in breach of taxpayers' confidentiality.
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In a new book published this week, Hodge writes: “The greatest challenge to restoring confidence in the British tax system stems from the secrecy that surrounds it.
“The confidentiality of taxpayers' interests is destroying confidence in the integrity of the system.”
She argues that as a first step to restoring confidence, “select committees should have access to papers on a confidential basis”. She argues for the creation of a “select committee of both Houses of Parliament which meets in confidence and holds HMRC to account”.
MPs would examine details of negotiations with companies “to assure parliament and the public that companies are paying their tax in full”.
Hodge would eventually like to go further still, arguing that since the amount of tax that public corporations pay is publicly available, “why can't we be privy to the arguments or negotiations that take place between the company and the tax authorities?”
She says the UK "should tear away the shroud of secrecy” around corporate tax bills with the negotiations for FTSE 100 companies made public.