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Improving Service Quality: Action in Response to the Inherited SERPS Problem

“The Inherited SERPS problem was a major failure of administration which caused anxiety and distress for many people. I welcome the Department’s positive response to the recommendations made by the National Audit Office and the Committee of Public Accounts and the action which the Department have taken so far to reduce the likelihood of such a mistake being made again.

“However, more still needs to be done. It is crucial that the momentum generated over the past two years is maintained if the Department’s customers are to be confident that the information and advice they receive is accurate, timely and delivered in the most appropriate manner.”

Published:
20 Mar 2003

Inland Revenue EDS Strategic Partnership: Award of New Work

“Partnerships like the one between the Inland Revenue and EDS, rely on trust and understanding between two organisations, qualities which are particularly important as requirements change and develop. Management of the risks associated with new work is therefore a challenging area for value for money. Much has already been achieved, and the Department must ensure that it retains the capability to manage the relationship and keep its options open for the future.”

Published:
29 Mar 2000

Inland Revenue Appropriation Accounts 1999 – 2000

“The Inland Revenue took on significant additional responsibilities during 1999-00 and continues to manage a challenging change programme. New schemes, such as tax credits, have, in general, gone smoothly but the Department should ensure that action is taken to manage risks which have emerged during the implementation of some projects.”

Published:
9 Feb 2001

Inland Revenue: Income Tax Self Assessment

“The self assessment system is providing an effective framework for managing the risks associated with the assessment and collection of tax. The system has improved the administration of income tax by making assessments more straightforward and by allowing a more focused approach to compliance work.

“However, the Inland Revenue need better management information to assess the effectiveness of the system and to identify areas for improvement as they continue to develop their approach.”

The main findings in the report are as follows.

Identifying potential taxpayers

Individuals have an obligation to notify the Inland Revenue of taxable income and gains. Some will fail to do so, for example ‘ghosts’ and ‘moonlighters’ operating in the hidden economy. The Department’s intelligence work identified some £22 million additional tax in 1999-00 by identifying people not registered for tax.

The Inland Revenue have recently reorganised the way they approach intelligence work. They have set up specialist teams to improve the focus of the work, are increasing the scope and scale of data-matching to identify non-compliance, and are planning to improve the way they collate the results. These changes should also provide the Department with better management information to assess the effectiveness of work at national and local level.

Getting in tax returns

Around 90 per cent of the 9 million tax returns issued each year are filed by the 31 January deadline. The Department estimate that there is potentially between £150 million and £300 million at risk from returns which remain outstanding after automatic £100 penalties have been applied.

The report recommends that the Department should develop their management information to monitor the use of automatic £100 penalties, daily penalties and estimated tax assessments to assess whether these incentives are effective and that they are being used appropriately. The Department are carrying out research into patterns of taxpayer behaviour which should help identify ways in which the current arrangements might be improved.

Carrying out enquiries

The Inland Revenue enquire into tax returns to deter and detect non-compliance. Using new powers, they have carried out enquiries into a random sample of tax returns. The results of this work are providing valuable information about the level and pattern of non-compliance in the taxpayer population as a whole. Results from the first two years, while not providing a definitive view, have, nevertheless, confirmed that substantial sums are at risk.

The self assessment system has enabled the Inland Revenue to introduce a greater uniformity in approach to addressing higher-risk aspects of individuals’ tax affairs and there is now a structured approach to risk assessment and the selection of cases for enquiry. The Department are continuing to develop their approach and in April 2001 introduced specialist teams to carry out risk assessment work. They have also analysed yield from completed enquiries to identify features which will be used to make a central selection of cases for enquiry in 2001-02.

Published:
5 Jul 2001

Inland Revenue: Inheritance Tax

“The Inland Revenue’s management of Inheritance Tax has improved over the last five years. The burden of having to deal with the tax affairs of a relative after his or her death has been lightened, an important matter for those who are not professionals in these matters. And Inheritance Tax returns are dealt with more efficiently.

“My report highlights a number of areas where the Revenue can build on those improvements, to help ensure compliance and improve service to Inheritance Tax payers.”

Published:
3 Dec 2004

Inland Revenue: Petroleum Revenue Tax

“My report provides a large measure of assurance about the Inland Revenue’s administration of petroleum revenue tax. I endorse the Department’s policy of continuing to develop its risk-based approach to the tax. Closer working with other government agencies and regular assessment of performance will help ensure that resources remain focused on areas of higher risk.”

Published:
14 Dec 2000

Inland Revenue: Standard Report 2002-2003 – Tax Credits

“The significant level of overpayment of Working Families’ and Disabled Person’s Tax Credit – potentially some 10 to 14 percent – is cause for serious concern and I have qualified my audit opinion.

“The level of problems caused to tax credit claimants and employers as the new tax credit systems went live in April 2003 demonstrated that there were undetected gaps in the design of the testing regime for the systems.

“The Inland Revenue must pay particular attention to ensuring that recovery from the problems with new tax credits does not undermine the Department’s reputation for integrity and accuracy when dealing with taxpayers’ affairs. This reputation is essential to the effective assessment and collection of tax.”

Published:
19 Nov 2003

Inland Revenue: Standard Report 2003-2004 – Child and Working Tax Credits and Stamp Duty Land Tax

“The probable level of overpayment of the new Tax Credits as a result of claimant error and fraud has led me to qualify my audit opinion on the Inland Revenue Trust Statement for a second year.

“It is important that the Inland Revenue tests the claims for new Tax Credits, as planned; and that it quantifies the financial implications of claimant error and fraud as soon as possible. The Department expects a result in respect of 2003-04 by July 2005, in time for the 2004-05 accounts.

“The successful introduction of Stamp Duty Land Tax, has reduced the opportunities for tax avoidance. Some issues remain and the Department should continue to review the tax revenues still at risk, even though these new arrangements have been introduced, and identify new ways of countering avoidance of Stamp Duty.”

Published:
21 Oct 2004
Money - notes and coins

Investigation into HMRC’s contract with Concentrix

HM Revenue & Customs’ (HMRC’s) contract with Synnex-Concentrix UK Ltd was terminated in November 2016. The contract was designed to add capacity to HMRC’s programme of interventions to prevent or detect error and fraud in personal tax credits awards. HMRC estimated that the contract would save £1 billion over its three year life time and an estimated £193 million, excluding Concentrix’s costs, had been saved by the time of contract termination.

Published:
17 Jan 2017