According to the Inland Revenue's annual report, released yesterday, recent
attempts to create a more dynamic and user-friendly service appear to be having
an adverse impact on the amount of tax collected as a result of corporate and
personal non-compliance investigations.
The UK tax authority's figures revealed that overall, the amount of additional
tax collected via non-compliance probes in 2001-02 was £3.8 billion, compared
with £4.5 billion the year before. According to the Financial Times, which
analysed the breakdown of the figures:
'The revenue's large business office, which deals with non-compliance by multinational
companies, secured £1.5 billion in corporation tax in 2001-02, compared
with £2.1 billion a year before...(whilst) the special compliance office,
which deals with non-compliance by individuals and companies, secured £337
million in tax in 2001-02, against £378 million.'
The FT also reported that the publication of the annual report coincided with
an attack by Inland Revenue chairman, Sir Nicholas Montagu on factions of the
department's staff which he feels are resistant to change and modernisation.
Observing darkly that: 'I do not like disloyal gossip to journalists,' Sir
Nicholas reportedly denied that the tax authority was neglecting its traditional
enforcement activities in favour of 'enabling' ones, and passionately defended
the recent change of emphasis, despite this year's disappointing results.