DEFRAUDING BRITISH GOVERNMENT

Dominion, Volume 31, Issue 151, 23 March 1938, Page 5

DEFRAUDING BRITISH GOVERNMENT

Large Sums Recorded

REPORT BY AUDITORGENERAL As a result of inquiries into eases of fraud and evasion of income tax settlements for a total of £4,122,388 were made in 3119 cases in the year ended March 31, it is stated in the annual report of Sir Gilbert Upcott, the Comptroller and Auditor-General in Great Britain, upon the appropriation accounts of revenue departments, which was issued recently. In the previous year settlements for a total of £3,734,188 were effected in 3045 cases. The special branch devoted to investigating important cases involving fraud dealt with 306 of these cases, settled at £2,381,061 last year, and with 316 settled at £2,186,397 in the previous year. Sir Gilbert stated that in the year ended last March amounts totalling £3,316,196 were remitted or written off as irrecoverable, £2,150,839 of this amount being for income tax, £236,253 for super-tax and surtax, £851,874 for excess profits duty, £9428 for death duties, and £67,802 for other duties. Of the remissions £69,019 was on grounds of poverty and £132,763 on grounds of equity. In the Vote for Customs and Excise the schedule of duty written off as irrecoverable during the year included sums of £22,916 Excise duty on beer and £127 brewers’ licence duty arising out of fraudulent operations at a brewery. The fraudulent operations involving the breach of requirements of notice statutorily imposed on the trade were systematically practised over a number of years, says the report, and criminal proceedings were instituted, two persons being sentenced to terms of imprisonment.

Out of a total claim of £61,038, which included £2175 in respect of duty apart from the fraud period and £9OOO in respect of penalties, £33,922 was recovered partly by the exercise of the Department’s statutory powers of distraint and partly as dividend in liquidation. The balance of duty uncollected together with £4200 in respect of penalties was written off with Treasury approval. "It appears that the Board of Customs and Excise were of opinion that the revenue officers in control of the brewery failed to discharge with reasonable intelligence their duties as perscribed in the departmental instructions,” says Sir Gilbert. “Disciplinary action was accordingly taken in the case of the officers concerned.” Receipts from fines, forfeitures, etc. amounted to £102,374 compared with an estimate of £65,000. They included £27,000 in respect of several fines inflicted for under-declaration of the value of horses imported from Ireland, a compromise penalty of £15,000 imposed on a company which had systematically understated the value of imported manufactured .articles, and £4BOO part of the penalty- of £9OOO sued for in the beer case. Post Office Contracts. The report stated that the Standing Committee appointed by the Postmaster- I General to review Post Office noncompetitive contracts involving £20,000 or more had been considering what action might be taken to place the Post Office in a better position to satisfy itself that prices paid for supplies under the several non-competitive agreements were fair and reasonable, the facilities at present available for examination of contractors’ costs and estimates not being' comparable to those afforded to the Defence Departments. It was mentioned that developments in the technical means of providing long-distance telephone circuits had •resulted in the. evolution of a new type of cable which, in addition io meeting telephone requirements, provided the only means available at present for transmitting over underground channels the special frequencies required for television and thus for extending the present limited range of television broadcasting. During the year, as part of the development of the telephonic system generally, the Department provided spare circuits in certain longdistance cables of this type in anticipation of television requirements. In the unlikely event of the demand for television circuits not maturing, nearly all the plant would be suitable for use to meet telephone requirements.