Tax & Accounting News
Bonus scheme for taxman
21/02/2007
Formerly, Tax Inspectors were able to obtain performance related pay
dependent upon their grading and a number of key skills.
Compliance staff across the UK have now been instructed to increase
the amount of recovered unpaid tax by 25% during 2007.
The tax man is now offering his Inspectors financial incentives to
encourage them to collect more money from individuals and business
and this no longer relates to their abilities.
They are now entitled to a bonus of up to 3% of salary based on their
collections.
The risk is that the new incentives and higher targets will lead to
more tax investigations. Pressure to bring in more money could lead
to Inspectors seeking out more companies and individuals for investigation.
In particular, the Inspectors have already been advised to target SME’s
because they know they are “easy to squeeze until the pips
squeak”.
They also put as many obstacles in the way as possible to make access
to the Appeal Commissioners difficult.
We therefore do not think that the tax man is going treat you fairly
in 2007. His tax collection goals have just been upped by 25% and he
regards SME’s as soft targets, easy to collect extra tax from,
particularly when compared to large businesses.
If you do get selected in 2007, look out for the inflation factor of
25% in the Inspector’s calculations.
Achieving financial targets will now form part of the Inspector’s
line-manager’s promotion/career progression plan. They are now
more likely to back a rogue Inspector rather than isolate them and
hope they get moved on as in the past.
At Harris Lipman we will do everything to ensure that the clients of
the firm are not amongst those from whom 25% extra tax will be collected
and will continue to highlight any possible areas that put clients
at risk of investigation.
We will also continue our philosophy to fight the taxman on every front
and assist with the mitigation of professional costs through the fee
protection service available to clients of the firm.
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