Tim Worstall

HMRC

Nice to see that the HMRC is as efficient as all the other parts of the bureaucracy:

New tax probes, which include inspectors telephoning people to quiz
them about their liabilities, cost more than £1m to conduct but raised
less than £665,000, official figures show.

Still better than the Irish (and I’m almost certain this isn’t an urban myth) experience. They appointed some special inspectors to have a rootle through the tax returns at a cost of £ 1 million IRP. Brought in £ 7 million inreturn, so next year the special office was closed as a cost cutting measure.

In

2 responses

  1. Mark Wadsworth Avatar
    Mark Wadsworth

    I’m not one to stick up for HMRC, but on the whole they are quite cost-efficient, their budget is about 1% of the tax they collect. But what you are talking about is a policing exercise, it’s not as simple as cost-benefit.
    Let’s assume that crime and tax evasion are Bad Things. If you stick an extra bobby on the beat or build another prison cell and the cost of crime falls by more than the cost of the bobby/prison cell, then it’s well worth doing.
    However, if there were enough bobbies on the beat and/or prison cells and crime were thus very low anyway, the incremental cost of an extra bobby/cell would be more than the cost of crime it deters, so what?
    Re Ireland, hmmm!

    Reply
  2. Alex Avatar
    Alex

    I’m afraid I’ve got to disagree with you on this on, Tim.
    I would have thought the object of the exercise is more pour encourager les autres. It’s more than likely that those lucky people chosen to have a ‘chat’ with HMRC mention it to their friends and family which, in turn, should encourage better tax compliance. It would not be easy to estimate extra revenues raised through any secondary effects but I would be most surprised if, overall, these tax probes are ultimately very good value for HMRC.

    Reply

Leave a Reply

Discover more from Tim Worstall

Subscribe now to keep reading and get access to the full archive.

Continue reading