§ Dr. McDonald
asked the Chancellor of the Exchequer if his Department has carried out a selective examination of schedule D returns and company accounts in the current financial year; and if he will estimate the extent of the understatement revealed to date.
§ Mr. Moore
[pursuant to his reply, 6 February 1984, c. 437]: The Department introduced the system of the 743W selective examination of the accounts of companies and schedule D taxpayers in 1977 and has applied it in all subsequent years, including the current financial year.
In the first six months of that year adjustments resulting from the selective examination have led to a net increase in profits and other income of £1,122,000 plus, as a separate item, a net increase in tax of £17 million. In addition, the investigation in depth of schedule D and company accounts produced extra tax, interest and penalties totalling £124.3 million in the nine months to 31 December 1983. In all cases the adjustments obtained include amounts relating to accounts received in the current as well as earlier financial years.