• Log Hours

How much do you think my case cost you?

Stephen Camm former Inland Revenue investigator and now head of tax investigations at PricewaterhouseCoopers says, “In a case like this it’s possible to estimate figures of £50,000 for the investigation and that figure may well double with appeals.”

HMRC themselves can’t say because they don’t calculate costs on individual cases so it’s impossible to find out the price to the taxpayer.

In the commercial world hours are logged on cases - that’s how the client is billed. It also means that a boss can pick up a file, clock the figures and say, “Why are we logging £50k worth of time on a case that’s unlikely to yield much more than £4k? Sort this out.”

Logging hours would be a way of monitoring investigator performance and would quickly highlight dud cases. If the commercial world can log hours, why can’t HMRC?

• Acknowledge the Adversarial Nature of Investigations and Reform The System

When a member of the public is being investigated by HMRC they should have similar rights to somebody being investigated by the police.

1. When an investigation is opened the taxpayer should be formally cautioned - at the moment they are sent a letter telling them an investigation has started, but not to worry.

2. The taxpayer must be assumed innocent until proven guilty, so the onus is on HMRC to provide evidence. At the moment the reverse is true.

3. If the taxpayer has no representation, independent representation should be offered.

4. If the tax payer is on a low income they should be able to claim Legal Aid.

5. All interviews should be taped and then a transcript of that tape should be signed - these then form an objective record - not subjective notes as is the current practice.

6. If a "lifestyle" questionnaire is requested by the investigating officer the reasons for it must be explained in full.

7. Findings must be evidence based.

8. The final 'sentence' i.e. interest, penalties and extra tax to be paid (if any) should be determined by an independent body - at the moment it is decided by the investigating officer.

9. If an investigative officer breaks the law they should be subject to appropriate criminal penalties.

10. Investigative officers should not receive bonuses for successful cases for exactly the same reasons that police officers don't receive bonuses for successful convictions.  

Our criminal system is far from perfect but when it's compared to the system HMRC operates it appears to be a shining beacon of virtue.