Revenue's tracker teams pull in pounds 4.7bn unpaid tax

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The Independent Online
THE INLAND Revenue collected pounds 4.7bn - the equivalent of an increase of 2.5p in the basic rate of tax - in the last financial year from its efforts to track down those paying too little or nothing.

It is the second-highest total collected this way. The Revenue is currently drawing up a code of conduct to govern its compliance work.

More than half the total in 1993/4 - pounds 3.1bn - came from technical reviews. One case involved a small quoted company which paid pounds 850,000 in fees to merchant bankers, stockbrokers and accountants while it successfully resisted a takeover bid.

The local inspector argued that the fees were incurred to preserve the company's shares in existing hands rather than in the course of trade, which would make them allowable against tax. The result was a compromise - pounds 620,000 was disallowed, but pounds 230,000 was deemed to relate to ordinary administration costs and was allowed. An extra pounds 200,000 tax was paid.

In some review cases money is handed back by the Revenue - a total of pounds 375m last year.

The most high-profile compliance work involves dawn raids such as the one to look for evidence of tax fraud at Nissan UK. But there are only around 10 such raids a year.

The compliance office will occasionally use informers to gather evidence on taxpayers who are evading tax. If money is recovered the informer can be paid a percentage. A handful of informers received pounds 7,050 in 1993-94. In one case Mr A transferred more than pounds 150,000 from a Jersey bank account to the UK. No details of this offshore account were shown in his tax return and he denied holding one. Mr A's bank confirmed he had collected the cash in person. He was sentenced to 12 months' imprisonment and fined pounds 10,000 plus costs.

The Inland Revenue has a special 'ghostbusters' unit to identify people completely unknown to the Revenue and moonlighters.

In one case 18 coach drivers in one firm were supplementing their incomes by selling souvenirs and refreshments, taking fees for dropping tourists at shops and even acting as bureaux de change. So far 10 of them have paid amounts varying between pounds 700 and pounds 14,000, bringing the Revenue an extra pounds 70,000.

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