Dramatic fall for tax probes

THE Inland Revenue has cut the number of investigations it mounts into taxpayers' affairs by almost a third even though the National Audit Office says £14bn of tax is still going unpaid.

But tax experts say the dramatic fall reflects a more targeted strategy by the taxman and say investigators are finally adopting a 'more intelligent' approach to taxpayers' affairs.

John Cassidy, head of tax investigations at the accountants PKF, said: 'The Revenue is being more selective. They've been gathering lots of data, cross-referencing it and making better use of it than in the past. They are better armed when it comes to enquiries and investigations than in the past.

'What we're seeing is a policy of not taking a blanket approach but focusing on risk areas, sectors and individuals, where there are problems that need addressing.'

Cassidy added: 'Those who get investigated might not agree with this but the more focused approach has got to be the right one for the Revenue. It's a refreshing change to have this targeted strategy rather than the haphazard and scattergun approach that we saw in the past.'

Cassidy said he also noticed tax investigators asking taxpayers 'more intelligent' questions than in the past:

'We used to see them come in with a list of questions they felt they had to ask in every case. Now they take much more notice of what's in the accounts and ask relevant questions. It's a sharpening of technique and it will be more productive.'