Inland Revenue in £1bn accounting bodge
A 'schoolboy error' at the Inland Revenue resulted in the embattled tax collector taking in almost £1bn less in tax revenues than it had previously claimed.
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The accounting bodge was condemned by MP members of the influential Treasury Select Committee, after the Inland Revenue was forced to revise figures published in three annual reports.
The Large Business Office, which investigates suspected tax evasion by the UK’s biggest companies, has admitted that it claimed back £420m less from tax evaders in 2000; £415m less in 2001; and £108m less in 2002.
The mistake arose when the LBO wrongly counted rebates to tax payers as money received. The mistake is pointed out in a footnote to the latest Inland Revenue annual report.
‘Since the chancellor’s tax revenues are less than he predicted last year, this is a significant admission,’ Norman Lamb, Lib Dem member of the Treasury select committee told the Observer. ‘To hide it away in a footnote is staggering.’ He described the mistake as a ‘schoolboy error’.
A Revenue spokesman said: ‘Unfortunately, from time to time complex systems do result in errors being made.’
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