CIOT questions whether taxman has resources to monitor tax evaders

THE CONTINUED MONITORING of tax evaders could require greater resources in HM Revenue & Customs, the Chartered Institute of Taxation has warned.

HMRC said that it will track individuals and businesses that have previously evaded tax for five years as part of its Managing Deliberate Defaulters programme. The measures include unannounced inspection visits, record checks, requests for extra information and inspecting the records of a firm's customers.

Gary Ashford, chairman of the CIOT's Management of Taxes Sub-Committee, said it was right that HMRC "come down hard" on people who deliberately under-declare tax.

However, he added: "We also have concerns about the extent to which HMRC are trying to automate this process.

"It is questionable whether the additional information requested will help to assess whether returns are accurate and, for the programme to work, HMRC will need adequate human resource to analyse and make effective use of the information when they receive it."

He added that it was crucial that HMRC is sure about whether the tax evader's errors were deliberate or the result of carelessness before deciding whether further sanctions and penalties were necessary.