Taxation – CA/Revenue crackdown fears

The Contributions Agency’s move from the social security department to the Inland Revenue could pave the way for wider inspections of company PAYE records, accountants warned this week.

In its new guise as the National Insurance Contributions Office, the CA became a Revenue agency today. But, for the time being, NICO and Revenue staff will still work in separate offices using separate administrative systems.

Tracey Norton, of Kidsons Impey’s remuneration and benefits group, feared that Revenue staff would be given Contribution Agency powers ‘by default’.

If they make joint visits, ‘Revenue officers will be able to be more aggressive and see more records,’ she said.

A Revenue spokeswoman said CA staff powers would be transferred, ‘but they are not extended beyond their current purpose. They cannot be used to inspect the employers’ operations of the PAYE tax rules’.

Incompatible IT systems will complicate the merger. Outsourcing company EDS will continue to operate the Revenue’s computers, but the Revenue will also have to oversee the National Insurance recording system operated by Andersen Consulting.

The new ‘three-in-one’ telephone support service made it easier for agents to get answers to tax, benefit and VAT queries, but Norton added: ‘I can’t see how customer service is going to improve in the short term.’

Related reading