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HM Customs and Excise: The Misuse and Smuggling of Hydrocarbon Oils

In November 2001, Customs produced estimates for the first time of the revenue loss from frauds on petrol and diesel. Customs estimated that in 2000 the loss could be between £450 million and £980 million in the UK, compared to revenue receipts of £22.6 billion on oils duties. Of this, diesel frauds on the UK … Read more

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e-Revenue

“Being at the forefront of the public sector’s drive to develop electronic services carries increased risks which need to be managed. Teething problems are to be expected, and need to be learned from quickly. The Inland Revenue has adopted a number of good practices from the private sector, including build and learn. An important message is that services must be demonstrably useful to the public if they are to use them on any scale, but it can take time to redesign existing processes particularly in an organisation as large and complex as the Inland Revenue.

“Many of the lessons learned by the Inland Revenue, and the good practices adopted, are equally applicable to other public bodies developing electronic services, and it is important to share these good practices as they develop.”

Published:
14 Feb 2002

e-Revenue

The development of the internet and ‘e’ services has opened new opportunities for public sector bodies to improve services, and the way they communicate with individuals and organisations, in innovative ways at potentially low cost. The Inland Revenue is at the forefront of this drive to offer internet and other electronic services. Early developments have … Read more

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HM Customs & Excise Appropriation Accounts 2000-2001

” I welcome and support the steps that Customs have taken to estimate the amount of revenue being lost through fraud, and to develop and implement counter-fraud strategies. Fraud is a major problem both for Government and for citizens, and I will be reporting on how a number of Departments are responding to the challenge. “

Published:
13 Feb 2002

HM Customs & Excise Appropriation Accounts 2000-2001

The National Audit Office today reported the results of their examination of HM Customs and Excise’s systems to ensure they provide an effective check on the assessment, collection and allocation of tax revenue during the year ending 31 March 2001. The report includes details of measures taken by HM Customs & Excise to combat fraud. … Read more

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NIRS 2: Contract extension

The Inland Revenue, when required to make major enhancements to its national insurance computer system (NIRS 2) to accommodate significant legislative changes, decided to award a contract extension to Accenture, its existing supplier. And, according to a report from the National Audit Office, published today, the contract extension: offered better value for money than the … Read more

Published:
14 Nov 2001

NIRS 2: Contract extension

The Inland Revenue, when required to make major enhancements to its national insurance computer system (NIRS 2) to accommodate significant legislative changes, decided to award a contract extension to Accenture, its existing supplier. And, according to a report from the National Audit Office, published today, the contract extension: offered better value for money than the … Read more

Report cover showing person filling out tax form

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