PracticeAuditNAO rebukes Customs for audits

NAO rebukes Customs for audits

Customs falls below auditing standards, says the NAO

The National Audit Office has criticised the standard and frequency of
Customs’ import duty and VAT audits.

A report revealed their frequency is decreasing and errors increasing, with
new traders having particular difficulty complying, generating an error rate of
almost 50%.

The NAO said traders take assurance from the results of audits and are
concerned about variable standards which result in irregularities emerging that
were not recognised on previous audits.

It called on the department to understand the level of compliance across all
trader groups and develop targets for the frequency and quality of audits.

The report said that in 2007-08, revenue from audits of large businesses fell
by 67% to £36.4m since 2005-05, while the number of audits fell by half to 183.

Revenue from audits of small businesses rose 14% to £141.4m but the number of
audits fell 42% to 9,130, while the proportion identifying irregularities rose
from 32% to 39%.

The NAO said risk and intelligence information is ‘fragmented’, the feedback
on compliance work unstructured and very few risk assessments are carried out by
other departments concerned with prohibited and restricted goods.

Further Reading:

BBC
trustees slam door on NAO probe

NAO
investigates bank bailout

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