Revenue from evasion investigations climbs 49%

THE REVENUE raised from purusing serious cases of tax fraud and evasion has rocketed by half to £8.5bn, a report reveals today.

Work by HM Revenue & Customs’ civil investigation directorate has increased the yield from investigations by 49% alongside reducing its own spend by 10% to £567m. A report by the National Audit Office (NAO) concluded that the return on its work has gone from 9:1 to 15:1 since 2007-2008.

Amyas Morse, the head of the NAO, said: “HM Revenue & Customs is taking significant steps towards achieving value for money in its civil investigations of suspected fraud or evasion. It has further to go, especially in its understanding of the relative costs and returns of its different enforcement activities, including civil investigations and their wider impact on taxpayer compliance and behaviour.”

THE NAO has recommended that HMRC speed up its investigations and improves its system for referring cases. It also said HMRC needs a way of making it easier to trace whether tax debts have been paid in full.

In 2008-2009 HMRC estimated that the tax gap – the difference between the tax paid and total obligations – stood at around £42bn.

In 2009-2010 the report reveals that the average length of an investigation fo suspected evasion was 25 months, against a target period of 18 months. A proportion, 15%, took more than three years to complete.

The average yeild to the taxman for each investigation is £329,000.

Despite the success the NAO found that HMRC fails to “routinely monitor” whether the unpaid tax and penalities resulting from its investigations are actually collected.

The NAO report said of HMRC: “It could not trace whether payment had been received on 27 per cent of the outstanding tax due on civil investigations of fraud passed for collection in 2008-09 as it was not possible to reconcile case management and accounting databases.”


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