Bonuses for Tax Inspectors

The Treasury has revealed that more than £1.4 million in bonuses have been paid to tax inspectors since 2008. This information came to light following a written Parliamentary answer given by Treasury minister, David Gauke, to a question from Tory backbencher Priti Patel.

HMRC operate two different schemes for those officers involved in criminal investigation work. The first is a performance award that is related to annual work and the second is a staff recognition bonus which is awarded for “exceptional in-year performance".

Bonuses are paid a year in arrears and the following amounts have been paid to date:

2008/09;  £379,656
2009/10;  £435,689
2010/11;  £349,168

For the current 2011/12 year, £275,326 has been paid out but this figure excludes the bonus recognition aspect of the scheme.

Concerns have been expressed over the bonus scheme within the tax and accountancy profession. John Whiting who is both tax policy director at the Chartered Institute of Taxation and Tax Director of the Office of Tax Simplification, does not object to tax inspectors being rewarded for good performance but warns that if bonuses are geared too simplistically to revenues they raise from investigative work it could present problems.

A reward system that is simply linked to income generation could encourage inspectors to pursue less meriting investigations so it is to be hoped that a mechanism exists to counter such a golden carrot.

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