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A report by Sir John Bourn, head of the NAO, was published today with the Inland Revenue Resource Account and the Trust Statement account of tax and NI collected. Sir John confirmed that the Inland Revenue continued to secure an effective check over the assessment, collection and allocation of tax during the year 2001-02. During the year, they collected some £214 billion net tax and National Insurance receipts.

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In 2001-02 the Department continued to experience difficulties in reconciling Working Families’ and Disabled Person’s Tax Credits where paid by employers, with the amount authorised by the Department. However, Departmental investigations revealed no evidence of systematic or large scale discrepancies between amounts approved for payment by the Department and those paid by employers.

In April 2003, the Department will introduce Working Tax Credit and Child Tax Credit to replace the current tax credits.

Sir John welcomed the important initiatives taken by the Department to enhance tax collection and debt management. He welcomed also some early successes. Particularly noteworthy were initiatives to encourage the return of Income Tax Self-Assessment forms by the statutory deadline through telephone contact, and initiatives to resolve longstanding cases where amounts are owed to the Department. He noted the importance of extending the Department’s initiatives to all tax streams and all classes of debt.

" It is important that the Department are learning the lessons from their experiences of the current tax credits to minimise similar problems in the new tax credits that are to operate from April 2003.

"They should also enhance their management information so that it is capable of demonstrating much more comprehensively their achievements in debt management and tax collection".

Sir John Bourn


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