Revenue attacked over tax fraud efforts

Link: NAO wants better controls on seized goods

In a damning report given to parliament today the National Audit Office urged the Revenue to use greater publicity to change public attitudes to fraud and to heighten the fear of detection.

It called for the Revenue to broaden its investigations to include lower-value cases as well as focusing its resources on higher value, complex cases. The Revenue prosecutes just over 60 individuals each year for fraud, of which 75% are successful.

Sir John Bourn, NAO chief, said: ‘It is important that the Inland Revenue has a clear view of the risks and scale of external fraud and the resources and approaches they are going to use to tackle them, for even a small percentage loss to fraud could amount to billions of pounds.’

Concerns over the use of cash transactions and tax havens to hide taxable assets and transactions was also raised in the report. In one investigation the Special Compliance Office discovered that 500 individuals committed an estimated £90m in tax fraud by hiding their transfers in offshore funds.

Sir John does however acknowledge difficulties in reliably measuring the size of the ‘tax gap’ – the difference between 100% compliance and actual compliance – through a lack of clear determiners of the scale of taxable activities in the shadow economy.

The report will add more pressure on Revenue chief Sir Nicholas Montague who has come in for a battering in recent weeks with MPs calling for his resignation.

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