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Revenue criticised over double standards

Inland Revenue inspectors are engaged in a game of bluff with companies in tax dispute cases, according to an analysis by tax protection specialists.

They frighten companies into capitulating with threats of referring undefended cases to the General Commissioners but are more ready to "back down and be more reasonable" when businesses use professional advisers to contest claims.

The contrast emerges from a study made by Abbey Tax Protection into official Revenue statistics showing 78pc of its investigations result in companies paying more tax.

Abbey's research, based on 2,500 claims where companies took out insurance to cover advisory fees, produces a different picture. It shows that since 1997 when Labour came to power the Revenue conceded defeat in almost 56pc of contested cases.