Within the United Kingdom, a tax inspector assists the tax collection agency in ensuring that everyone pays their fair share of taxes. HM Revenue & Customs (HMRC) is the tax collection agency in charge of assessing income tax in order to pay for public services such as the National Health Service (NHS) and other government programs, as well as police, fire, and military defense. The HMRC is similar to the Internal Revenue Service (IRS) in the United States, and a tax inspector is comparable to an IRS agent in the United States.
A tax inspector’s first task is to determine when it is likely that a person is not paying all of the taxes owed to HMRC. Inspectors do this by going over tax returns and looking for red flags that indicate a person is committing tax fraud. These red flags may appear when a person’s tax deductions are excessive in comparison to his income, or when a person in a primarily cash business earns less than expected. Other red flags may also attract the attention of the tax inspector, but the HMRC does not reveal all of the details about what will trigger an investigation.
When there are red flags, the tax inspector will contact the person in question and conduct an audit to see if the correct amount of taxes was paid. He may pay the individual a visit and interview witnesses, as well as examine bank statements and other sources of information about earned income and taxes paid. If tax evasion is discovered, the tax inspector will report the incident to HMRC. After that, the back taxes will be collected.
A tax inspector may also be involved in HMRC court cases involving tax evasion. These are essentially situations in which a person is prosecuted for tax evasion and are referred to as tribunals. The inspector may present evidence that led to the charge of tax evasion that he discovered. He will testify at the tribunal hearing and otherwise assist HMRC in proving the accused’s tax evasion case. Because income taxes play such an important role in keeping the UK economy afloat, tax inspectors play an important role in society.