Revenue insists enforcement is working

Link: Former Revenue director slams Montagu

During exchanges in the Lords, spokesman Lord McIntosh of Haringey dismissed Black accusations. He said that since Black’s retirement eight years ago there have been ‘profound changes in the Revenue’s responsibilities and how it does its work’.

He added later: ‘The thrust of the Inland Revenue in recent years has been to encourage compliance – that people should pay the right tax and receive the right benefits the first time rather than requiring enforcement action.’

He claimed that had been successful but this had not shown up in enforcement statistics.

He said the Revenue had made it clear that where large business taxpayers were not willing to co-operate it would be ‘aggressive and ruthless’.

McIntosh denied the Revenue was having to switch resources to deal with individual self-assessment.

And he claimed a substantial fall in receipts from the Large Business Office was due to a very large under-payments and very large receipts from cases which had taken years to build up.

The issue was raised by Tory peer Lord Glentoran, an elected hereditary aristocrat, who claimed there was a £600m fall in revenue secured by the Revenue’s business division between 2001 and 2002, with an even larger £1.7bn fall in revenue secured from all non-compliance investigations in 2002 compared with 2000.

Former Tory chairman Lord Tebbit accused McIntosh of having gone into ‘hyper-flannel mode’ instead of simply rejecting the allegations.

Liberal Democrat spokesman Lord Newby said that while there may be a greater degree of compliance and virtue as a result of a different Revenue strategy, that this amounted to 30% more virtue in a single year ‘seems implausible’.

He called for Black’s criticism to be taken more seriously.

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