§ Mr. Austin Mitchellasked the Chancellor of the Exchequer what is the number of staff currently employed directly in detecting tax evasion and the total amount of evasion detected in the last available year, and the amount of money saved by their efforts.
§ Mr. Peter ReesIn both the Inland Revenue and the Customs and Excise departments, the detection of evasion forms part of the normal duties of the majority of staff. Each department does, however, have specialist investigation units.
In the Inland Revenue, about 120 staff are employed in 10 inquiry branch offices and about 70 staff in the four special offices established during 1976 and 1977. About 70 staff also work in the board's investigation office which handles certain 181W cases of fraud, forgery and theft, including those relating to sub-contractors' tax exemption documents. The Inland Revenue estimates that, in the year to 31 October 1978, the yield of tax, interest and penalties arising from the detection of tax evasion amounted to about £70 million.
In Customs and Excise, nearly 700 staff are employed in specialist investigation units, on cases of evasion of duty or tax or breach of prohibitions such as importation of drugs. Statistics of offences are published in the annual reports of the Commissioners of Customs and Excise, of which the latest is for the year ending 31 March 1978 (Cmnd. 7455). In that year, court fines, costs and settlements under section 288 of the Customs and Excise Act 1952 (exclusive of arrears) for offences in relation to Customs and Excise duties and VAT amounted to £3.6 million. Control visits to VAT traders were estimated in 1978 to result in the detection of £50 million underdeclared tax. However, neither the penalties nor the under declarations can be attributed directly to fraudulent evasion as distinct from technical breaches of revenue law.
No estimate can be made of the deterrent effect of the investigation work done by either Department.
§ Mr. Fieldasked the Chancellor of the Exchequer if he has established any specialist offices to tackle tax evasion and avoidance; when the offices were established; what is the number of staff employed; and if he has plans to extend this service to taxpayers.
§ Mr. Peter ReesThe Inland Revenue has for many years carried out complex anti-avoidance work at its head office, whilst the larger and more important cases of evasion have been handled by 10 inquiry branch officers around the country. In addition, certain cases of fraud, forgery and theft are investigated by the board's investigation office. The Revenue has also recently established four special offices to tackle other kinds of tax evasion and avoidance. The first was opened in Edinburgh in January 1976, followed by others in London and Manchester in June 1976, and a fourth in Birmingham in September 1977. The staff at present employed in these specialist offices totals about 260. The second182W London special office, with about 8 staff, will be opened shortly. There are no immediate plans to open more.
The Customs and Excise has around 700 staff employed on specialist investigation work. Their work covers both evasion of tax and the detection of breaches of prohibitions such as the importation of drugs. It has not opened any new specialist offices in recent years, and has no current plans to do so.