HMRC is offering tax inspectors financial incentives to encourage them to collect more money from individuals and businesses, ‘The Times’ has claimed.
The newspaper said bosses at the Revenue have instructed compliance staff across the UK to increase the amount of recovered unpaid tax by 25% during 2007. The report added that bonuses of up to £2,000 are being offered to inspectors who meet their targets.
Experts warned that the new incentives and higher targets will lead to more tax investigations. An unnamed former tax inspector told ‘The Times’ that pressure to bring in more money would lead to inspectors seeking out more companies and individuals for investigation.
Matt Coward, a senior tax adviser at the accountants Blick Rothenberg, added: “It is perfectly right and proper for HMRC to recover monies that they are due. However, if this bonus system means a correlation between tax collected and bonuses paid, resulting in overzealous and unreasonable inquiries, then taxpayers should be extremely concerned.
“We cannot have a system which encourages more frequent, lengthier and more tenacious inquiries simply based on whether someone gets a bonus or not.”
Information released under the Freedom of Information Act shows that top performing HMRC staff are now entitled to a bonus of 3% of salary, while workers awarded a good performance mark can receive a 1.8% bonus.