The Revenue issued a pamphlet in May - IR72 Investigations: The Examination of Business Accounts - explaining what happens when the accounts of a self-employed person are selected for investigation by an inspector of taxes.
It illustrates how easily the confidential nature of a married woman's tax affairs may be breached where the husband is suspected of tax evasion.
The promise of independence and privacy seems fragile in the face of figures for the 1990-91 tax year showing 74,477 cases were investigated, resulting in the collection of additional taxes and penalties of nearly pounds 830m.
And it is not only the wife who should worry about her privacy, but also the unmarried woman who lives with a man under suspicion of tax evasion. She, too, could find that her financial affairs are no longer hers alone.
The pamphlet, under the heading 'Will anyone else be involved?', states: 'The inspector may have to ask detailed questions about your living expenses, and this could involve talking to the person you live with. Most couples, whether or not they are married, combine assets and expenses, so the inspector may have to ask your partner about his or her spending in order to get the full picture.'
The pamphlet goes on to explain: 'Such details are obtained most easily in the course of a joint discussion. But, if either of you does not want to disclose details in front of the other, the inspector will see or write to you separately. The inspector will try to ensure that personal details are not disclosed unnecessarily, but there may be times when information with a bearing on your tax affairs has to be revealed.'
An interview with the inspector of taxes at his office can be stressful. It is obviously easier for the inspector to deal with matters affecting husband and wife in a joint discussion, and it seems that the pressure on inspectors to complete investigations suggests they should do this when possible. The presence of both partners at an interview can often be uncomfortable when their personal financial affairs are probed; it is easy for differences to arise between the partners concerning their income and spending.
One would expect the inspector to seize upon any indefinite statements or a lack of agreement between the taxpayers as possible grounds on which he might base a judgement in the Revenue's favour.
Tax investigations can be very demanding for those concerned, and a woman in this situation might be well advised to refuse to attend any meeting about personal affairs when anyone other than a Revenue official is to be present - even if it is her husband.Reuse content