I am aware of the comments in question. I have consulted the Revenue Commissioners who have assured me that the opinion expressed is quite incorrect and that large cases are receiving appropriate audit attention relative to the risks involved. The Revenue Commissioners have advised me that it is essential to have an audit presence in each segment of the tax paying population and the Revenue audit programme aims to strike the correct balance between the audit of large companies which, although small in overall numbers, pay the largest proportion of tax, and the audit of small and medium-sized businesses which, although significant in overall numbers, pay a relatively low proportion of overall tax.
Very different considerations apply to large companies as against medium and small-sized businesses. The nature of the tax risks differ in the different sized companies. Different audit approaches are, therefore, taken by Revenue to reflect these underlying differences. Under the audit programme, the tax records of the largest 2,000 cases are reviewed each year whereas this would not be the case with small and medium-sized businesses. In 1999, 475 audits were carried out on some aspect of these large cases and this is a much higher proportion than that for smaller cases. Moreover, an internal Revenue analysis of the top 20 non-financial large corporates shows that audit activity was carried out in every case in the two year period 1998 and 1999. Proportionately more taxpayers with a turnover exceeding £1 million are audited.
I understand that Revenue also devotes significant effort to tackling tax avoidance which can be a feature of larger enterprises and high worth individuals. Revenue's attention to large cases is also evidenced by its tax recoveries from large cases. The details of many of these recoveries are not publishable because the cases do not meet the strict criteria for publication. Nevertheless, it is important that the public would have information about the size of recoveries from large cases.
For the top 30 cases settled by Revenue in 1999, there was a total yield of £25 million, that is an average of more than £800,000 per case. However, only three cases were published and these settlements ranged from £328,000 to £622,000. Details of the other 27 cases were not publishable but their settlements ranged from £338,000 to £3,500,000. In 1999 there were 146 cases of audit settlements for over £100,000 but details of only 32 of them were publishable.
Additional Information.
I would also mention specific measures taken in relation to large cases. Three professional accountants were recruited on contract in 1999 and two more will be recruited in 2000 which will further strengthen the effectiveness of the large companies audits. A working group consisting of experienced Revenue audit managers and auditors is currently examining the approach in large cases to consider what changes, if any, are appropriate to improve risk identification and auditing procedures.
There was an interim addition to staff in the audit and investigation area in 1999 with the appointment of ten higher grade inspectors, that is assistant principal officer level. I have recently approved the Revenue Commissioners' request for additional staff, 155 of whom I understand are intended for the audit and investigation area. This will substantially increase Revenue capacity to audit more large cases while coping with the temporary increase in work arising from the DIRT, Ansbacher and other investigations.