Taxman tempts inspectors with £2,000 bonus

Her Majesty’s Revenue & Customs is encouraging closer scrutiny of businesses and individuals in the shape of lucrative cash bonuses for tax inspectors.

A reward of up to £2,000 is on offer to enforcement officials who meet tough new collection targets by pursuing people they suspect of dodging their commitments.

Each inspector or ‘top performer’ at HMRC can earn up to 3 per cent of their salary under the scheme which was discovered by The Times, and confirmed to Freelance UK yesterday.

One former tax inspector told the paper that the pressure to bring in more money inevitably would lead to inspectors seeking out more companies and individuals for investigation.

Fears were also raised that the bonus system could include a correlation between tax collected and bonuses paid - meaning taxpayers might be at risk from a breed of overzealous inspectors.

But speaking on Friday, an HMRC spokesman told Freelance UK: “Inspectors are not and will not be paid bonuses linked to the amount of tax they collect.”

Separately, the tax authority has instructed its compliance teams to increase the amount of unpaid tax that they recover by a quarter over the next year.

In fact, the department’s recently published Public Service Agreement states that an extra £10.5billion in outstanding tax must be recovered by tax inspectors by 2008.

More positively, the department intends to “deliver reductions in compliance costs of small businesses,” presumably by ‘supporting those who seek to comply’ at the expense of those seeking an ‘unfair advantage.’

Business taxation is the biggest burden facing one in ten companies in the capital, according to an enterprise report published this week by the Institute of Chartered Accountants of England & Wales.

For the 12 months of 2006, the majority of London-based companies cited business tax as more of a burden than employment taxation, corporate governance and VAT.



 

8th January 2007

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