Taxman to turn whistle blower on dodgy accounts

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The Independent Online

The Inland Revenue is to be given new powers to pass on suspected cases of accounting fraud for investigation, as part of the Government's post-Enron reforms.

It is understood that this will be one of the central proposals to come out of the Company Law Review by competition minister Melanie Johnson. This consultation period ended last November.

A Bill, to be included in this November's Queen's Speech, will establish a channel between the Revenue and the beefed-up Financial Reporting Review Panel, which will investigate company accounts.

Under existing law, the Revenue cannot pass on confidential tax information to authorities other than Customs & Excise. However, Revenue officials have long felt that they should be able to act on evidence which points to suspect company accounting.

November's Bill is also expected to include the powers to set up Community Interest Companies. These will be a joint venture between the voluntary and private sectors. Any profits will ploughed back into community services. Trade and Industry Secretary Patricia Hewitt hopes to see the creation of between 100 and 300 Community Interest Companies in Britain.

A second, larger, Bill, will be published in a later session of Parliament. This will contain the company law reforms.

A DTI spokesman refused to comment on the plans for the Revenue. Asked why the results of the review had not yet been published some seven months after the consultation period ended, he said: "We are considering the responses to the White Paper very carefully.

"This is an enormous undertaking which involves updating hundreds of pages of company law. The outcome will affect every firm in Britain, so it is important to get it right."