Accountants have attacked a rise in information sharing by the Inland Revenue and other agencies, which they claim is creating confusion and expense.
Information sharing between the Revenue, Customs & Excise and the Contributions Agency has led to more investigations, they said.
The departments’ need for co-operation has increased since the introduction of corporate self-assessment, which required Revenue investigations to start within 12 months of a tax return’s submission.
Tax experts said investigations carried out at the same time by the departments, each with varying levels of powers, will lead to confusion.
Andrew Lowden, senior tax partner at Baker Tilly, said that in a recent case, the Revenue used Customs to get information because ‘it had greater access to company records’.
He said companies were being bombarded by different enquiries from agencies on similar issues. He added that resulting investigations were raising the costs of professional fees. ‘We are using senior-level staff because they are required at every level of investigation,’ he said.
Bob Brown, Ernst & Young national director of tax investigations, said: ‘I’m very concerned about the Revenue’s powers and I think we will be in for a surprise at the next Budget.’
A Revenue spokeswoman denied the faster turnaround of enquiries had anything to do with agencies sharing information. She said it was merely a result of the impact of self-assessment, and added: ‘They are pushed on a lot quicker than they were previously, because we now want to get enquiries done within 12 months.’
A spokesman for Customs & Excise said the flow of information between agencies was not having a negative impact on businesses.
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