The Inland Revenue’s failure to meet its own targets for policing the self-assessment regime could aid tax evasion, writes Damian Wild.
The Revenue’s target compliance figures were excluded from a recently published review of the first year of self-assessment. But closer analysis of the Revenue’s 1998/1999 plan revealed that officials were investigating just half the number of returns they said they would.
The plan showed that officials conducted a ‘full business inquiry’ into just 0.7% of tax returns last year, equating to about 25,500 firms, according to provisional 1997/1998 results. The target set was 1.3% – or 43,500 returns – of the eight million filed.
The shortfall was even greater when it came to tax returns taken up by the Revenue for an ‘aspect inquiry’. The official 1997/1998 target was 3%, or 82,500. The provisional result, however, was only 1.5% or 41,000.
Peter Back, director of Horwath Clark Whitehill’s SimpliTax service, said there should be an independent inquiry into the Revenue’s running of the self-assessment system.
‘These results are a shock and a serious embarrassment for the Revenue,’ he said. ‘Our concern is where self-assessment needs additional policing and auditing. It has fallen well below its own targets.’
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