Inland Revenue Annual Report Reveals Disappointing Tax Collection Figures

by Jason Gorringe, Tax-News.com, London

20 December 2002

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.

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