THE government department with the task of clamping down on tax avoidance is suffering from poor staff morale and a lack of trust, according to a leaked consultant's report.

One senior figure at HM Revenue & Customs said the problems at the tax body were so severe they required a process of "truth and reconciliation".

Labour's Cathy Jamieson, the shadow Treasury secretary, said the revelations showed "a worrying level of poor management" in HMRC.

Tax avoidance by the wealthy has shot up the political agenda amid revelations of individuals and corporations aggressively reducing their tax bills.

Comedian Jim Carr was forced to apologise earlier this month after he took advantage of a Jersey-based scheme that allowed him to – legally – pay much less than if he had paid standard income tax. The loss to the Exchequer from tax avoidance is thought to be in excess of £25 billion.

HMRC, formed after a merger of the Inland Revenue and Customs & Excise in 2005, is responsible for the collection of taxes – it gathered a record £468.9 billion last year.

However, relations between staff and management are poor. The problems became so acute that HMRC last year hired a consultant, Nita Clarke, to produce a report on internal "people engagement".

The findings have been obtained by the Sunday Herald.

On the relationship between HMRC and its staff, the report was blunt: "At the heart of the engagement challenge in HMRC is a disconnect between employees and the overall organisation. Many employees feel that the organisation as a whole neither values, listens to, nor respects them."

But the report observed there were "no grounds for suggesting that a transformation in engagement levels is imminent".

It also said staff felt they were unable to speak out internally about issues in HMRC, adding: "Many of these problems were felt to emanate from behaviour at the top of the organisation. ExCom [HMRC's executive committee] members were perceived to behave on occasion in a competitive, non-collegiate way."

The report said part of the process of rebuilding trust had to include leaders "acknowledging and accepting responsibility for things that have gone wrong".

However, Clarke said she had "every confidence" that HMRC would "embed a new culture based on trust and empowerment".

Her report followed a damning survey of HMRC staff last year, in which only 18% of employees believed the organisation was managed well as a whole.

Clarke also noted that HMRC found itself bottom of the Civil Service league regarding its employee engagement results.

Pete Lockhart, the Public and Commercial Services Union group secretary for HMRC, said: "These are points we have been making since the department was formed in 2005 and are a feature of the initial list of issues we have presented to the employer for consideration."

Jamieson said: "If they are serious about stopping tax avoidance, the government must ensure that HMRC is properly staffed, resourced, and has a good working environment where staff feel they are valued for their contribution."

A spokesman for HMRC said: "We were disappointed with the results of last year's staff survey and invited Nita Clarke to work with staff and unions to chart a way forward - There have been changes and we are determined to make further improvements."