Supplementary memorandum submitted by
HM Revenue and Customs
Question 71 (Mr Don Touhig): Could you perhaps
provide us with a note, looking back at that £2.8 billion,
[understated Self Assessment Tax liability] as to how much you
are getting and you reckon you have had back in and how much you
think you might have to provide for the tax gap
Details about figures on tax losses, and other
additional information can be found in Developing Methodologies
for Estimating Direct Tax Losses, a technical document published
alongside the Pre-Budget Report on 9 October 2007, available on
the HMRC website:
www.hmrc.gov.uk/pbr2007/mdtl-direct.pdf
The figure of £2.8 billion given on in
Table 3.1 of that document is an estimate of the understatement
of tax liabilities on 2001-02 Income Tax Self Assessment (ITSA)
returns and is based on the ITSA random enquiry programme. As
with any statistical estimate it is subject to a degree of uncertainty.
Table 3.1
LOSSES IDENTIFIED FOR ITSA RETURNS (£
BILLION)2
| 1999-2000 | 2000-01
| 2001-02 |
| Losses due to incorrect returns | 2.4
| 2.7 | 2.8 |
| Compliance Yield1 | 0.4 |
0.4 | 0.4 |
| Non-payment | 0.1 | 0.1
| 0.1 |
| Total tax losses identified | 2.1
| 2.3 | 2.5 |
| Total tax liabilities | 19.6
| 19.8 | 19.2 |
| Proportion of liabilities (per cent)
| 11% | 12% | 13%
|
1 Enquiries settled during each year
2 Figures rounded to the nearest £0.1 billion. As a result
components may not appear to sum.
Recovery of all understated liabilities would involve work
with many millions of taxpayers and would not be cost effective;
instead HMRC's strategy is to focus its compliance work according
to the level of risk in each case.
Question 112 (Mr Philip Dunne): Has the level of complaints
been rising or declining since the development of contact centres
We do not believe that there is a correlation between the
introduction of HMRC contact centres and the level of complaints.
The attached table sets out the number of complaints received
over the last 10 years. The most recent data shows a 7% decline—at
a time when HMRC contact centres underwent significant expansion.
HMRC has gained several major new responsibilities over the
period. As would be expected, the volume of contacts has risen
in consequence and also the numbers of complaints. There were
two new major responsibilities introduced. The merger between
the Inland Revenue and National Insurance Contributions Office
in April 1999, which resulted in an additional 10,000 complaints,
and the introduction of new tax credits from 2003 onwards.
Other factors that have influenced the volume of complaints
received include the measures introduced by the Inland Revenue
and Customs to improve access to their complaints systems. Better
signposting for customers as a result of improved customer service
can lead to more complaints. Customers know where and how to complain.
The Citizens Charter, which set out standards customers can expect,
was also introduced at this time. HMRC believe that these and
the general expectations and attitudes to challenging poor service
are key reasons why complaints numbers have risen.
Complaints about HMRC contact centres do not make up a significant
proportion of the overall number of complaints—only 4% last
year.
| Year | IR |
CE | HMRC | Total
|
| 2006-07 | |
| 99,139 | 99,139 |
| 2005-06 | |
| 106,783 | 106,783 |
| 2004-05 | 87,214 | 6,540
| | 93,754 |
| 2003-04 | 68,700 | 7,478
| | 76,178 |
| 2002-03 | 42,000 | 9,472
| | 51,472 |
| 2001-02 | 37,000 | 11,885
| | 48,885 |
| 2000-01 | 42,000 | 10,501
| | 52,501 |
| 1999-2000 | 48,000 | 6,182
| | 54,182 |
| 1998-99 | 37,000 | 5,412
| | 42,412 |
| 1997-98 | 34,000 | 5,140
| | 39,140 |
| 1996-97 | 28,000 | 4,339
| | 32,339 |
|
