The tax authority should adopt a tougher attitude towards big companies who play the system, Prime Minister David Cameron said on Thursday, seeking to show his coalition government was spreading the pain of austerity fairly.
His comments follow a report in December by members of parliament who said cosy relations between big companies and HMRC, the tax authority, gave the impression that it was softer on them than it was on individuals and small businesses.
That perception is damaging for a Conservative-led administration seeking to avoid being branded as a privileged elite at a time when families and small firms are under pressure from drastic public spending cuts and faltering economic growth.
Cameron and his deputy Nick Clegg, leader of the Liberal Democrats, signalled that cracking down on avoidance will be a key theme running up to the annual budget in March.
I think we need a tougher approach (from HMRC), Cameron told a group of small business leaders, in response to a question about tax deals for mobile telecoms group Vodafone and U.S. investment bank Goldman Sachs.
One of the things we're going to be looking at this year is whether there should be a more general anti-avoidance power that HMRC can use, particularly on wealthy individuals and on the bigger companies, to make sure that they pay their fair share, Cameron said.
He was referring to a so-called general anti-abuse rule or GAAR, a new power which the government is considering giving to HMRC to help it tackle tax avoidance.
Left-wing activists have sought to shine attention on companies which they say are failing to pay as much tax as they should, most notably in a protest at Vodafone's main London store in 2010. The company says it does not owe any tax.
ARMY OF ACCOUNTANTS
Millions of people who play by the rules, who pay their taxes, who work hard ... are angered when they feel there is a wealthy elite or large businesses who can pay an army of tax accountants to get out of paying their fair share of tax, Clegg told BBC Radio 4 on Thursday.
The report published in December by Parliament's Public Affairs Committee said there were more than 25 billion pounds outstanding in unresolved tax bills.
HMRC disputed that figure and denied that there were systemic failures in the handling of tax disputes.
The government will say whether it will introduce a GAAR during the presentation of the 2012 budget.
It is currently studying recommendations on how to do so published in November by senior taxation lawyer Graham Aaronson, who conducted an 11-month independent study into the issue.
Clegg said he very much hoped that the government would make progress on the GAAR in 2012.
Vodafone came under the spotlight after it reached a settlement of 1.25 billion pounds in a dispute arising from an acquisition.
Some lawmakers on the Public Affairs Committee said the figure was lower than it should have been, but Vodafone has described it as a full and final settlement.
In October it emerged that Goldman Sachs had lowered its tax bill by 10 million pounds in 2010 after a privately negotiated deal allowed it to avoid paying interest on 30 million pounds back taxes it owed.
(Reporting by Estelle Shirbon)