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Inland Revenue Should Increase Investigations And Prosecutions, Say MPs

by Robert Lee, Tax-News.com, London

15 January 2004

The Public Accounts Committee, the parliamentary body responsible for overseeing the administration of UK public spending, has criticised the poor performance of the Inland Revenue’s compliance department, and has recommended that it step up the number of investigations and prosecutions of alleged tax fraud.

“To those involved in or contemplating fraud the chances of getting caught could appear minimal, since the Revenue only carry out 400 serious fraud investigations and 60 prosecutions a year on a customer base of more than 30 million,” observed the committee in a report released on Monday.

“The 12:1 financial return achieved by the Special Compliance Office, which excludes the yield from criminal prosecution work and wider deterrent effects, suggests that a substantial increase in investigation activity would be cost-effective. More prosecutions should also bring opportunities to make greater use of the confiscation and restraint powers to deprive fraudsters of the wider proceeds of their crime,” stated the PAC.

The report also noted the Inland Revenue’s apparent failure to address the “growing threat” from fraud involving offshore bank accounts and tax arrangements.

The Committee argued that the Revenue has failed to learn from initiatives undertaken in foreign jurisdictions in this area, such as the US Internal Revenue Service's recent offshore credit card campaign. The report suggested that the UK tax authorities should obtain additional information by imposing a statutory duty for financial institutions providing offshore accounts to disclose the identity of account holders.

The full text of the Public Accounts Committee's Inland Revenue Tax Fraud Report can be found in the Tax-News Resources section.

 

 






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