§ Mr. David Youngasked the Chancellor of the Exchequer what is the total cost of the salaries of value added tax inspectors and Inland Revenue tax fraud investigators respectively, and the average cost of employing each investigator; and what is the average amount of fraudulently withheld tax and value added tax recovered by each investigator.
§ Mr. Peter Rees[pursuant to his reply, 25 March 1980, c. 515]: As VAT is a self-assessed tax, VAT inspectors are concerned with ensuring that trades are able
86Wing table represents the value of the personal allowances for 1979–80 increased by (a) 17.82 per cent. and (b) 15.49 per cent. together with the estimated costs of the changes. The costs quoted are for a full year at 1980–81 income levels and represent the result of changing each allowance consecutively in the order quoted.
to account for the tax promptly and accurately and not simply with identifying additional amounts of tax due. For the year ended 31 March 1980, it is estimated that VAT officers will identify about £85 million additional tax, though the proportion of this which will have been fraudulently withheld cannot be separately established.
The total cost of salaries of VAT control officers is estimated to have been about £24 million in that year. The average salary cost of each control officer and the average amount recovered were resspectively about £6,400 and £23,000.
In the case of the Inland Revenue, the detection of tax evasion forms part of the normal duties of most of the staff and a large part of the money recovered by the Revenue by way of tax, interest and penalties arises from investigations carried out in the local offices.
As I explained in my reply to the hon. Member for Wolverhampton, North-East, (Mr. Short), on 27 February [c. 637], there were 288 staff in specialised investigation units on 1 January 1980.
For the year ending 31 October 1979 the total cost of the salaries of the staff employed in those units was about £2.3 million. The average salary cost of each member of staff and the average amount of tax, interest and penalties recovered were respectively about £8,100 and £102,000.