Tax Evasion

Oral Answers to Questions – in the House of Commons at 12:00 am on 24th July 1980.

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Photo of Mr Robert McCrindle Mr Robert McCrindle , Brentwood and Ongar 12:00 am, 24th July 1980

10. Mr. McCrindle asked the Chancellor of the Exchequer if he is satisfied that no further action is required to combat tax evasion.

Photo of Mr Peter Rees Mr Peter Rees , Dover and Deal

No, Sir. That would be too complacent. but the Board of Inland Revenue and the Board of Customs and Excise are constantly improving their techniques to combat tax evasion, and that is reflected in the results achieved.

Photo of Mr Robert McCrindle Mr Robert McCrindle , Brentwood and Ongar

If my hon. and learned Friend is as concerned as I am about the substantial loss of revenue that may result from tax evasion, and if he bears in mind the fact that small business men are already subjected to random VAT tests and that suspected social security scroungers may be visited by social security inspectors, should not the Treasury appoint inspectors to carry out random tests of those suspected of avoiding income tax? That would be in the interests of the taxpayer.

Photo of Mr Peter Rees Mr Peter Rees , Dover and Deal

My hon. Friend will be aware that a new special office has been opened in Sheffield, and that the special office in London has been strengthened. In-depth checks are conducted on income tax returns.

Photo of Mr Richard Wainwright Mr Richard Wainwright , Colne Valley

In view of the growing and justified sense of unfairness at the failure to collect income tax effectively—despite uneven pressure on certain taxpayers—how much longer will Treasury Ministers claim that PAYE has an advantage because it does not require an income tax return each year from millions of taxpayers?

Photo of Mr Peter Rees Mr Peter Rees , Dover and Deal

If the hon. Gentleman is suggesting that we should change to a system of self-assessment, he should bear in mind the considerable cost imposed on taxpayers in the United States of America.

Photo of Mr Michael Brown Mr Michael Brown , Brigg and Scunthorpe

Will my hon. and learned Friend speculate upon whether his Department is satisfied with the operation of section 32 of the Inland Revenue Regulation Act 1890? How does he ensure that evidence from informers is reliable? Is he satisfied with the operation of the Act?

Photo of Mr Peter Rees Mr Peter Rees , Dover and Deal

Neither I nor any other Treasury Minister is concerned with the information given by informers. As the House will know, and as I have made clear in a written answer today, the conduct of individual cases is exclusively a matter for the Inland Revenue. As my hon. Friend will know, the amounts paid to informers are very small. Whether the evidence is valid and trustworthy is exclusively a matter for the Inland Revenue to decide in the first instance.

Mr. Ron Brown:

Are not the Government covering up for scroungers at the top, and for those who back the Tory Party? Does not that typify the fact that this Government are a class Government, who are unwilling to take any action against those who take away the wealth that rightly belongs to the Exchequer? Why do not the Government do something? Is not it a fact that the Government are willing to attack working class people and those on social security benefit but that they are not willing to deal with their own kind? The country will judge the Government in due course.

Photo of Mr Peter Rees Mr Peter Rees , Dover and Deal

The hon. Gentleman has completely misunderstood the position. The Inland Revenue is charged with the duty of collecting tax and of initiating proceedings whenever it thinks it is justified. No Treasury Minister is to the slightest degree concerned with such operations.