Taxation – Business trails taxman

Inland Revenue plans to co-ordinate its internal handling of cases are being put into action, tax experts said this week, writes Phillip Inman.

But the Revenue’s increasing level of communication is not being matched by large businesses targeted by tax inspectors. ‘We are seeing an increasing level of sophistication from the Revenue and the way it co-ordinates its cases,’ said Alistair Kendrick, a senior tax investigator at KPMG.

‘But we are not seeing that sophistication being matched by company tax departments.’ His view was supported by Phil Davis, a tax investigations partner at Ernst & Young, and several tax experts in other Big Six firms.

Last year, Accountancy Age reported claims that businesses had seen Revenue inspectors arrive ‘mob-handed’ to interrogate staff on all aspects of their companies’ tax affairs. They said Revenue officers covering each area, from PAYE to corporation tax, worked alongside each other to determine the overall tax burden. Finance directors voiced their concerns behind the scenes that Revenue inspections could tie up their departments for months.

Now businesses are reporting that ‘co-ordinated caseworking’ – the Revenue term for the policy – has ‘come of age’. The new teams are co-ordinated by the Revenue’s large business offices. LBO officers take on the role of case controllers and commission other departments to carry out work on their behalf. All conversations and correspondence are also reported back to the case controller.

Davis said: ‘The system isn’t working entirely smoothly, but it is working.’

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