New points system for tax investigators

New points system for tax investigators

The Inland Revenue plans to scrap its current system of assessing the effectiveness of its investigators, in favour of a new system based on a more ‘descriptive’ approach.

Under the new system, investigators’ work will be assessed on a descriptive scale of attainment, from ‘excellent’ to ‘unacceptable’. Investigators will be assessed at different stages of the investigation, as it progresses from selection to final settlement, said Michael O’Callaghan, compliance advisor in the compliance division of the Revenue.

The new system will be implemented in 1997/98 and will run in parallel to the existing system which awards point under the Accounts Investigation Monitoring System (AIMS).

The current system has been open to a number of abuses. Investigators could maximise their points by examining the more complex cases such as those involving financial institutions.

O’Callaghan said: ‘The problem with the old system is that it didn’t encourage line managers to take a more critical view of the cases being reviewed, which is a problem associated with any system with a subjective element of assessment.’

Though the points system has been criticised for its subjectivity, many practitioners feel that the system’s potential for abuse was its fundamental flaw.

Simon McKie, chairman of the English ICA’s Tax Faculty, said: ‘Many practitioners feel that, when an investigator’s performance appraisal is based on a crude points system, though there is not a direct relationship between performance and pay, there may be an indirect relationship.

‘Any business needs a system of rewarding its people for performing well, but many accountants have got the impression that investigators are under too much pressure to get results, which may have eroded the Revenue’s even-handedness.’

The issue of how to reward Revenue investigators will become even more pressing with the introduction of self-assessment.

‘Self-assessment will move the emphasis from the Revenue computing the tax to the Revenue policing the taxpayer. This will switch the Revenue away from investigating for a prima facia reason toward random investigations of taxpayers,’ said Simon McKie. ‘This makes the points system more dangerous because investigators will be dealing with a whole new class of taxpayer whose sense of justice is different.’

Whitepaper

The Future of Finance is in the CFO's Hands

Business The Future of Finance is in the CFO's Hands

2m
Save a Week a Month Consolidating Accounts

Accounting Software Save a Week a Month Consolidating Accounts

3m
Mitigating Risk Through Internal Control

Legal Mitigating Risk Through Internal Control

4m
Could tax season have run more efficiently?

Corporate Tax Could tax season have run more efficiently?

4m

Related Articles

Boris Johnson’s tax cut: Would it work?

Brexit Boris Johnson’s tax cut: Would it work?

2w Dave Beach
What’s yours is mine –Joint property and Form 17

Personal Tax What’s yours is mine –Joint property and Form 17

7m Helen Thornley, ATT Technical Officer
Supreme Court rules against Pimlico Plumbers in landmark employment case

Legal Supreme Court rules against Pimlico Plumbers in landmark employment case

1y Alia Shoaib, Reporter
Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

Personal Tax Inheritance tax is 'unfit for modern society' and should be abolished, says think tank

1y Alia Shoaib, Reporter
Rent-a-room relief – the survey says…

Personal Tax Rent-a-room relief – the survey says…

1y Helen Thornley, ATT Technical Officer
What should the OTS prioritise in its review of inheritance tax?

Personal Tax What should the OTS prioritise in its review of inheritance tax?

1y Alia Shoaib, Reporter
LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

2y Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

2y Emma Smith, Managing Editor