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Tax Evasion

Volume 124: debated on Monday 7 December 1987

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To ask the Chancellor of the Exchequer if he will make a statement on his policy towards the use of prosecution as a means of dealing with tax evasion.

[holding answer 1 December 1987]: The law provides for money penalties to be the normal punishment for tax evasion. However the possibility of prosecution is an important deterrent to the spread of tax evasion. The Inland Revenue therefore considers prosecution where a fraud is particularly prevalent or where a case is a very serious one of its type.

To ask the Chancellor of the Excehquer if he will publish in the Official Report the number of full-time equivalent posts dedicated solely or mainly to the detection of tax evasion.

[holding answer 1 December 1987]: 3,264 Inland Revenue officers, measured in staff unit equivalents, were assigned solely or mainly to investigation work at 31 March 1987.

To ask the Chancellor of the Exchequer if he will give details or estimates of the amounts of unpaid tax recovered by the Inland Revenue for each year since 1979 from (a) persons prosecuted for tax evasion and (b) persons dealt with but not prosecuted for tax evasion.

[holding answer 1 December 1987]: The total yield—tax, interest and penalties—due from Inland Revenue investigations for each year since 1979 is as follows:

Year ending 31 October£ million
1979111·6
1980137·9
1981165·1
1982265·6

Year ending 31 March

£ million

1983304·8
1984399·2
1985594·4
1986694·5
1987741·3

It is not possible, except at disporportionate cost, to distinguish amounts relating to prosecution cases from those relating to non-prosecution cases. Nor is it possible to state how much of the amount due was ultimately recovered.

To ask the Chancellor of the Exchequer if he will give details or estimates of the number of persons dealt with by methods other than prosecution for tax evasion since 1979.

[holding answer 1 December 1987]: The Inland Revenue figures do not distinguish between cases of outright fraud and other cases which have been investigated. Nor are the figures for the number of individuals concerned available. However, the number of cases where additional tax has become due as a result of an investigation is as follows:

Tax Office and Enquiry branch investigations
Number yielding extra tax onlyNumber involving interest, or interest and penalties (in addition to tax)
Year to 31 October
197931,65121,229
198030,87022,344
198132,58922,515
198235,64927,656
Year to 31 March
198335,39231,417
198433,58537,249
198531,74738,859
198627,10537,484
198722,94938,707
PAYE audit investigations
Number where only current year adjustments necessaryNumber where adjustments of earlier years necessary
1984–853,92017,179
1985–863,87920,431
1986–874,48023,848
The method of recording information altered in 1984 and comparison with earlier years would not be meaningful.

To ask the Chancellor of the Exchequer if he will give details of estimates of the amount of tax due but not recovered from persons known to be involved in tax evasion since 1979.

[holding answer 1 December 1987]: This information is not held centrally.