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What does a Tax Inspector do?

By Christy Bieber
Updated May 17, 2024
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A tax inspector works within the United Kingdom, helping the tax collecting body ensure that everyone is paying his or her fair share of taxes. The tax collecting body is called HM Revenue & Customs (HMRC) and its responsibility is to assess income tax to pay for the public services provided, including the National Health Service (NHS) and other public service programs, police departments, fire departments, and military defense. The HMRC functions in a similar manner as the Internal Revenue Service (IRS) in the United States, and a tax inspector performs a similar function as an IRS agent in the US.

The first duty of a tax inspector is to identify when it is likely a person is not paying all the taxes he owes to the HMRC. Inspectors do this by reviewing tax returns and attempting to identify red flags that suggest an individual is guilty of tax evasion. These red flags may exist when a person's tax deductions are unreasonable relative to his income or when a person in a primarily cash business has income not in line with what would be expected. There may also be other red flags that catch the eye of the tax inspector, but the HMRC does not fully reveal this information as to what will trigger investigation.

When red flags exist, the tax inspector will contact the person in question and conduct an audit to determine whether the appropriate amount of taxes were paid. He may visit the individual and interview witnesses or review bank statements and other sources of data about income earned and taxes paid. If tax evasion did occur, the tax inspector will identify it and report the issue to the HMRC. The appropriate back taxes will then be collected.

A tax inspector may also be involved in court actions for tax evasion brought by the HMRC. Referred to as tribunals, these are essentially situations in which a person is prosecuted for tax evasion. The inspector may present evidence he uncovered that led to the charge of tax evasion. He will testify in the tribunal hearing and otherwise assist the HMRC in proving its tax evasion case against the accused. Because income taxes play an important role in keeping the economy in the United Kingdom afloat, tax inspectors serve an important function within society.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

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