Revenue and Customs team up in £34m crackdown on black economy
Five joint Customs and Excise and Inland Revenue teams set upto target the black economy have found nearly 4,000 unregisteredtraders who ought to have been paying VAT.
More teams are expected to be set up following their success -reported in the NAO report on the performance of C&E and theInland Revenue last year.
The report hit the headlines because it also revealed a hugeincrease in Chancellor Gordon Brown’s ‘war chest’, with totalCustoms receipts up 4.3% and Revenue receipts up 9% last year.
The NAO said the teams , operating on a trial basis, have so farnetted £34.3 million in additional revenue, and predicted morewould be formed.
The teams were operating under the Closer Working Initiativelaunched by the revenue departments in a vain bid to head offdemands for them to merge.
The Shadow Economy Teams are being integrated with Cash Teamswhose job it is to check that registered traders returns matchtheir business – who raised £48 million in additionalassessments.
The developments were revealed in an NAO report in whichComptroller and Auditor General Sir John Bourn said they areoperating systems which provide an effective check on theassessment and collection of tax.
The report also revealed Customs has become concerned about VATfrauds involving accountants, insolvency practitioners andsolicitors.
Attacks on the system have included repayment frauds, `missing’trader frauds and bogus registrations.
The NAO said the Revenue have ‘largely resolved’ difficultiesintroducing the self-assessment management system – but thatcomplaints have continued over the design of statements ofaccount and fundamental further changes are under consideration.
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