The UK governments report on transgender equality says that Britain's legal and health systems are failing transgender people. The parliamentary report called for laws protecting the community to be amended.
The report said official terminology surrounding the estimated 650,000 Britons who are likely to be "gender incongruent" was too narrow and too focused on treating transgender identities as medical conditions.
"High levels of transphobia are experienced by individuals on a daily basis (including in the provision of public services) with serious results," parliament's Women and Equalities Committee said in its report.
The committee said the terms "gender reassignment" and "transsexual" used in Britain's 2010 Equality Act, which is aimed at protecting transgender people among others, were too restrictive.
The terms are often used to refer those who are either planning or undergoing gender reassignment surgery, which for many transgender people is not the case.
"The protected characteristic should be amended to that of 'gender identity'," the committee said.
The report criticised the National Health Service (NHS), and said transgender people frequently encountered doctors with a lack of knowledge and sometimes prejudice.
The committee called for a "root-and-branch" review of the way transgender people are treated by the NHS.
"We are also concerned that Gender Identity Services continue to be provided as part of mental-health services, giving the impression that trans identity is a disease or disorder of the mind," the report said.
Turning to the legal system, the committee said police should receive mandatory training on transphobic hate crime.
It also called on the government to amend a "medicalized, quasi-judicial" application system for transgender people to have their gender officially recognised, a process many transgender people find humiliating and intrusive.
"An administrative process must be developed, centered on the wishes of the individual applicant, rather than on intensive analysis by doctors and lawyers," the committee said.
Despite the committee's criticism, Britain is relatively progressive in promoting transgender and sexual equality, and the report noted the country's advances in protecting transgender, gay, lesbian and bisexual rights.