Questions I’d ask if I was a tax inspector #1: who is paying school fees in cash?

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I’ve welcomed a new line of enquiry by HM Revenue & Customs on offshore accounts, reported this morning. In saying so I did, however, imply that I thought HMRC was not asking, systematically, the right questions to tackle the systemic issues of tax evasion in our economy.

So it seems beholden on me to suggest a few lines of enquiry I’d open if I was a tax inspector. They have to be:

a) Systematic

b) Targetted

c) Highly likely to result in high quality information leading to worthwhile enquiries

d) Aimed at tax evasion

e) Aimed at higher net worth individuals

Let’s start with this idea: I’d like HMRC to write to all public schools in the country and ask them a simple question:

Please would you supply the names and addresses of all parents, guardians and carers making payment of school fees in respect of a pupil attending your school who have settled total liabilities exceeding £500 in cash in the last two years?

If you do not have a record of  the name of the person making such payments in respect of a pupil please advise the names and addresses of all the pupil in question’s parents / guardians. 

I have reason to believe that payment of school fees in cash is a commonplace practice.

There’s only one explanation for it – that the money is untaxed.

And the advantage of asking schools is that the identity of the payment has to be unambiguously associated with a named person and address.

I’d expect a significant revenue yield from enquiries resulting from such letters.

And for the record, I’m not seeking commission 🙂