I spoke at a meeting for PCS - the union for a majority of staff at H M Revenue & Customs -yesterday.
One person present criticised me for concentrating on the tax gap for large corporations - as I've just done on this blog. As she pointed out the entire staff at HMRC now dedicated to investigating the accounts of more than 500,000 small and medium sized employers in the Uk amounts to just 2,000 people. The result is that on average each can expect to get a visit from HMRC once every 250 years.
No wonder they find significant non-compliance when they do turn up. The chance of being found out is so low the risk of abusing is, in the opinion of far too many, worth taking.
Which is yet more evidence of the existence of a substantial corporate tax gap and the sheer folly of getting rid of more staff at HMRC.
Can you run me through the maths on that – you seem to be suggesting 1 visit per Case Officer per year, which even by the standards of the most rabid right wing cynic indicates a remarkably low productivity level on the part of HMRC. Given time to prep, a day on site and post event wrapup, wouldn’t 1 week per visit, or say 40 per year (allowing for investigations) be more realistic. Which comes down to a visit every 6 1/4 years. Now bear in mind that in there you’ll have many subs & holdcos of big corporates, caught up in group wide inspections, and I think the reality is a bit less jaw dropping..?
If that is correct is means each tax inspector can only manage 1 inspection a year? Is that correct?
@Concerned citizen
a) They do a lot more than visit
b) There are also about 2 million non-employer cases. They also get visits
c) You’ve clearly never ever done a tax investigation if you think they all get wrapped up in a week!
@Richard Murphy
I’ve already answered that point…
And the answer is no – of course not, the issue related to random visits as I understood it – and yes, they’re mighty infrequent was the point being made
And that reduces compliance
a) True, but what? How much of it ties in to visit related compliance?
b) then why didn’t you mention that in the first place? Or are they dealt with by another team?
c) Read the post again; there’s more than 40 weeks in a year. I know there’s a huge time lag in correspondence, but that doesn’t equate to hours worked on the case, and on random visits they should generate relatively few and relatively brief investigations (although I take your point that the fewer visits there are, the more likelihood that ?businesses?employers?companies? whichever we are now talking about will take the risk and then get picked up randomly)
And finally, on the random/targeted point, who does the targeted visits and what proportion are they now? Because by definition, if you’re in a “targeted” sector, your odds are now worse than 1 in 250 years. Still not good enough to act as a deterrent maybe, but if you’re going to throw scare story statistics like 250 years around it’d be nice to know they actually mean something in the real world – the true odds are apparently 1 in 250 years + targeted visits..? I’m not disparaging the task faced by HMRC, or the work that many of them do; I’m just concerned that people might pick up the 1 in 250 years like it actually means something, which right now I’m afraid I’m not convinced it does.
@Concerned citizen
Hands up – I should have made clear I meant random visits in the original post
Apologies
That’s fair enough – let’s just hope for the Exchequer’s sake that they make an awful lot of targeted visits, otherwise the underlying concern remains as valid as ever; if the risk of getting found out is too low then the rewards of non-compliance will be just too tempting.