TaxPersonal TaxCall for inheritance tax simplification

Call for inheritance tax simplification

Public Accounts Committee calls for simplification of inheritance tax, and more severe penalties for cheats

The House of Commons Public Accounts Committee (PAC) has called for a major
simplification of inheritance tax, combined with severe penalties for those who
try to cheat the system.

The all-party group of MPs said that people who try to cheat the Inland
Revenue out of inheritance tax should be severely punished. But Westminster’s
main financial watchdog also said that those who are grieving for a loved one
are still being confronted with overly-complicated paperwork.

The PAC also said that tax chiefs are being too lenient on cheats – there has
been only one successful prosecution for inheritance tax fraud.

Tory MP and former minister Edward Leigh, who chairs the PAC, said it is
important that the Revenue come down firmly on those who cheat by knowingly
giving false information on inheritance tax forms.

He said on the reports publication: ‘Until now, it has been too lenient in
the penalties it imposes.’

The taxman can apply penalties for negligent inaccuracies in tax returns but
used this sanction on just 100 cases last year, and has only recently got its
first successful prosecution for fraud.

The Committee found that the Revenue received 67,500 inheritance tax returns
last year and launched enquiries into 3,600 cases, which brought in an addition
tax yield of £126m.

Leigh said more people are now affected by inheritance tax, and the Inland
Revenue has tried to ease the burden on relatives trying to sort out the tax
affairs of people who have died.

‘But more can be done to make it easier for those who are recently bereaved
to carry out the necessary business with the taxman,’ he said.’

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