Taxman's Clampdown on Evasion Yields £4.32bn

HMRC’s concerted efforts to fight tax evasion through improving staff productivity in the last five years has put £4.32bn into government’s coffers but the figures are still short of its £4.56bn target.

The figures were released in a review, published by the National Audit Office, which gave details of how the tax authority’s Compliance and enforcement programme introduced new systems and improved techniques aimed at targeting evaders. The programme cost £387m, involved more than 40 separate projects and reduced staff numbers by 3,374, between 2006 and 2011.

But while the NAO considers the scheme a success, it believes ‘it is not yet exploiting its full potential’.

Head of NAO Amyas Morse, said: ‘This major programme has helped HMRC to increase tax yield substantially and has introduced ways of working which will strengthen HMRC’s compliance work in future.

‘The department could, though, achieve better value for money fr om its investment in compliance work by improved understanding of the impact of individual projects and ensuring that its staff have the capacity to exploit new systems to the full.’

Budgetary lim its, according to the NAO were a factor in HMRC missing its intended target of £4.56bn in additional tax yielded plus it generating staff productivity improvements of 36% and not the 42% that was initially forecast.

Commenting on HMRC not meeting its targets, Tina Riches, director, technical at the Chartered Institute of Taxation said: ‘It should not be considered a reflection of how staff have performed, they appear to be doing their job well. The figures are not disappointing, it’s just the expectations were wildly optimistic.’

Riches added: ‘HMRC’s increasingly effective trawling of the internet can target 1,000 businesses in one go but is always going to pick up small and medium-sized companies, they have not really found an answer to deal with those at the larger end.’