Inland Revenue's LBO Slammed For Tax Collection Reporting Error

by Robin Pilgrim, LawAndTax-News.com, London

21 January 2004

It emerged at the weekend that the UK Inland Revenue's Large Business Office (LBO) over-estimated tax collected over a three year period to the tune of around £943 million.

In a footbote to its latest annual report, the LBO revealed that it had wrongly counted rebates to taxpayers as money that it had received, rather than paid out. The agency was therefore obliged to revise its collection figures downwards by £420 million for 2000; £415 million for 2001; and £108 million for 2002.

Treasury Select Committee member, and Liberal Democrat MP, Norman Lamb announced that he would be demanding an explanation from the head of the Inland Revenue, Sir Nicholas Montagu for this "schoolboy error", explaining that:

"Since the Chancellor's tax revenues are less than he predicted last year, this is a significant admission. To hide it away in a footnote is staggering."

Meanwhile, speaking to the UK media, an Inland Revenue spokesman merely observed that:

"Unfortunately, from time to time complex systems do result in errors being made."

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