§ Mr. Simon HughesTo ask the Chancellor of the Exchequer how much money was recovered through VAT investigations and the control programme in the last financial year; and how many staff are employed on these duties.
§ Mr. Heathcoat-AmoryIn 1993–94, HM Customs and Excise finalised approximately 1,150 cases of fraudulent evasion of VAT. Some 109 cases were dealt with through criminal investigations using the VAT Act 1994 and other statutes, and the rest were dealt with using the civil penalty regime introduced in the Finance Act 1985.
These cases involved VAT arrears and penalties in excess of £40 million and custodial prison sentences in the order of 100 years.
By its nature, the detection of fraud also prevents further evasion. We estimate the evasion prevented for 1993–94 to be in excess of £120 million as a result of the investigation effort.
Some 613 staff were employed in 1993–94 on VAT investigation work.
In the financial year 1993–94, 5,429 staff years were utilised in VAT assurance visiting. Gross additional liability identified in the course of the visiting programme was £2,140 million. Taking over declarations of VAT into account, the net additional liability discovered was £1,324 million.