Revenue and Customs are losing £2.8bn a year in tax, through people not filling in their tax returns correctly and it is not economic to get the money back.
The admission comes in a report by the Commons public accounts committee into the failure of Revenue & Customs to meet best business practise.
The report is scathing in its accusations that the Revenue & Customs does not have a user friendly website, fails to meet standards in answering calls, give incorrect information and have amassed 200,000 complaints in two years.
The report suggests that the self assessment of tax is not working and is need of overhaul.
David Gauke the shadow treasury minister blames Gordon Brown, saying “The man who led HMRC for ten years, has to take responsibility for the mess he left behind.
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