Tax fraud snoopers

COUNCIL tax in the UK or cukai pintu as it is called in Malaysia is the assessment or rates paid by owners and occupiers of buildings. It is based on the value of the building or the rental it can yield. That’s where the similarities end.

In the UK, you can ask for and get details of how your tax money is spent. At the beginning of every calendar year, most councils send you a booklet on their budgets including detailed expenditure on the various facilities and amenities they provide. Besides, the law requires them to publish the preceding year’s audited income and expenditure accounts which are open to public scrutiny. One can also demand from the auditor, explanations on any expense deemed excessive or unfair.

Although on paper, Malaysians are entitled to the same, one hardly gets to see the accounts, let alone ask questions.

“We will account for even a piece of string” were the famous last words of former Petaling Jaya councillor Wong Sai Hou, but when it was pointed out that the council intended to spend RM110,000 on “film and photo processing”, the silence was deafening indeed.

But wherever you go – from Athens to Zurich – you’ll come across a section of the population which wants to take advantage or exploit loopholes in the system. The UK is no exception. Because certain categories of people are exempted from tax, the temptation to avoid payment is always difficult to resist.

When two or more adults occupy a building, they are subjected to tax. However, students, disabled people, people on benefit are not counted when it comes to the number of occupants. Those who live alone get rebates and many are enticed by such savings because annually, it can add to a big sum.

Last month, the Southend Council in Essex hired a firm of private investigators to check out the circumstances of every taxpayer who claims to live alone. It comes after neighbouring Castle Point Council admitted it used the same firm.

Councils fear some people may be fraudulently applying for the reduction while sharing their home with a partner or even a family. The investigators have been paid to compare every application against information held by credit check companies as well as the electoral register. If an applicant’s credit history, which includes information on individuals’ borrowing and repaying, appears to suggest he is not living alone, the firm is authorised to carry out further checks, including surveillance.

Because of financial constraints, especially by cuts in funding, the Redbridge Borough Council where we live has found an ingenious, inexpensive method of detecting council tax fraud. Most of us see rubbish collectors as those paid to take our dirt away. On the contrary, they also act as the eyes and ears of the council and wash your dirty linen in public.

Six weeks ago, there was a knock on the door. Two officers from the council wanted to have a chat with me. The conversation went something like this:

Q: How many adults stay in this house?
A: Three.

Q: How many bags of rubbish do you put out each week?
A: Usually two, some times three.

Q: We have records of having collected up to 10 bags in the past few weeks. Any special reasons for the large volume?
A: No. I don’t think we exceeded three.

They thanked me and left. Rubbish is collected every Friday morning and we have to put it out the night before.

Something was amiss, and I decided to check it out. After putting out two bags at about 10pm, I kept watch from the bedroom upstairs. Yes, my next door neighbours had brought out their rubbish and seven bags ended up in my compound, while they left five in theirs.

Unknown to my prying eyes which were focused on what was happening, council officers were carrying out surveillance from opposite the road. They walked over, exchanged a few words with the neighbours, went in for an inspection and left. When I visited the council the following week, I was told that my neighbours had been claiming rebates and that they had been asked to pay back-taxes running into a few hundred pounds.

“If you haven’t done anything wrong, you have nothing to worry about. It is important we scrutinise claims carefully and catch anybody who is trying to cheat the system,” an officer told me.

Some councils have also asked residents to blow the whistle on anyone they suspect of defrauding the council. The Redbridge Council has launched a new drive to tackle benefit cheats, corruption, the sub-letting of council properties and other financial misdemeanours by calling on people to call its Whistleblower Hotline with information.

The scheme, which critics claim is nothing but a “snoopers’ charter”, has been in place for several years, but the council is now trying to raise its public profile.

The officer said: “The whistleblowing scheme aims to stamp out any kind of fraud and put a stop to people who are cheating council taxpayers who rely on essential services. The scheme has been well publicised among staff but we are now raising awareness among local residents, workers and our partners.”

The move has been welcomed by some taxpayers, who said the council should do everything in its power to catch cheats, while others claimed it was an infringement of their privacy. The moral of the story is to pay your taxes and not take the rubbish collectors for granted!

R. Nadeswaran has no problems with snoops because he pays his non-rebated council tax on time. He is theSun’s UK correspondent based in London and can be contacted at: citizen-nades@thesundaily.com