16 January 2004
MPs have criticised the Inland Revenue for failing to clamp down on tax evasion, following reports that the Treasury loses £3bn a year because of fraud.
A Commons' Public Accounts Committee report, Tackling fraud against the Inland Revenue, published on January 12, examined the progress the department had made in tackling tax fraud and concluded that measures used to deter evasion were unsatisfactory.
The committee found that the Revenue had not estimated the direct gap between full and actual compliance with tax rules, and had not undertaken investigations commensurate with the sums at stake, nor kept pace with changes to its investigative remit.
MPs said too many resources were spent on tax credit fraud work at the expense of general tax evasion. 'The financial returns on investigations suggest it would be cost-effective to do many more,' the report states.
'With only 400 serious fraud investigations each year against 30 million customers, those contemplating tax fraud may well calculate that the chance of being caught is remote,' said PAC chair Edward Leigh.
PFjan2004
