Revenue snaps back at Guardian criticism

The Inland Revenue has responded to a series of articles in The Guardian that allege the Department has allowed large companies to cut tax corners, 'cheat' and avoid paying tax.

The first article, 'Inland Revenue's tax breaks for big business' (23/07), alleged: 'the 2,000 largest corporations in Britain are being allowed to cut corners in tax law and escape Inland Revenue penalties as part of the Government's efforts to produce a business-friendly environment.'

Nick Davies, author of the articles, said he held evidence the companies had collectively failed to pay more than £2 billion in tax and 'had been invited to rewrite the rule book on how the Inland Revenue should investigate them.'

The Inland Revenue denied its inspectors had been told to cut corners in the law.

The second article, Poor leadership, missed chances and billions down the drain (24/07), investigated 'how failures in philosophy and management let big companies and multinationals get away with avoidance and cheating.'

The article said: 'We have found evidence that the entire compliance effort of the Inland Revenue is struggling under a history of poor investment and bad management which have left key divisions short of staff, demoralised and frequently outgunned by highly resourced opponents who have poached many of their colleagues.'

The second report also touched on the Revenue's run-ins with faulty computer software.

Nick Montagu, Head of the Inland Revenue, issued the following response: '[The journalist's] distorted picture of how the Inland Revenue tackles compliance ignores the immense amount of work that we put into ensuring that everyone from big business to private individuals understands and pays what they owe.

'[The journalist's] inference that we are going soft on avoidance and evasion is wholly unjustified.

'I make no apologies for the fact we want to understand and work with business and individuals to make it easier for them to get their tax right first time. That - rather than the simplistic approach to the complex subject of compliance that [the journalist] appears to advocate - is the cheapest and most efficient way of securing the flows of revenue to the Exchequer.'

René Carayol, Non Executive Director of the Inland Revenue, also issued a response. He said: 'Reading the articles left me feeling very disappointed as they did not reflect in any shape, size or form the Inland Revenue that I have come to know in the 18 months that I have been a non executive director there.

'Without wishing to sound defensive, some of the inferences in the articles were nothing short of disgraceful.'