The number of calls to HMRC’s fraud hotline doubled during the last tax year, with callers dialling in more than 40,000 tip-offs on potential tax cheats.
The tax authority also confirmed that in response to information passed to them by informants it had paid out £343,500 – a fall of 23% compared to the previous year and down from a high of £605,000 in 2015.
Figures released by HMRC in response to a Freedom of Information request showed that 40,695 people called the tax evasion hotline in 2017-18, more than double the 20,200 reports of the previous year.
The department receives more than 100,000 total reports from the public online or via a specific hotline each year, a number which fluctuates from year to year. “All allegations made to HMRC are assessed carefully and a decision is made of the most appropriate course of action,” said an HMRC spokesperson.
The awards are based on what is achieved as a direct result of the information provided, and although HMRC has not publicly confirmed the exact calculation of any reward paid, it is believed a range of factors determine the amount. The factors include (but are not limited to) the tax recovered, the estimate of the loss of revenue prevented and other measurable benefits such as the time saved in working compliance cases.
While the information provided by individuals is treated as strictly confidential, HMRC does not provide updates to individuals who report tax evasion due to legislative obligations.
An HMRC spokesperson told AccountingWEB: “Last year, HMRC secured an additional £30.3bn in tax through our work to tackle error, avoidance and evasion, and intelligence we receive from the public makes an important contribution to our work to close the tax gap and fund our vital public services.
“It is only right that people who have information that could help us to investigate tax evasion are able to get that information to us quickly and easily. The vast majority of people pay their taxes and rightly expect us to tackle the minority who seek to evade making their lawful contribution to our vital public services.”
Why the rise in call volumes?
In April 2017, HMRC launched its fraud hotline which replaced two former hotlines: the tax evasion hotline and customs hotline. The merging of these hotlines may account for part of the rise in call volumes. The department has also publicly promoted the new hotline on social media and made it more accessible on its own website.
Others in the profession have commented that the incentivisation of such reporting will continue to fuel the rise in report numbers.
The rise in hotline numbers coincides with a reported 30% fall in the number of property raids. According to data collected by law firm Pinsent Masons, HMRC conducted 471 property raids last year, down from 669 in 2016/17.
While the tax authority has an increasingly sophisticated arsenal of data analysis tools to highlight tax evasion, it is also working from a larger data pool, with information coming from in banks and credit card companies, along with individual reports from the hotline.
Anyone wishing to report potential tax fraud can call the HMRC fraud hotline on 0800 788 887, post to HM Revenue and Customs, Reporting Tax Evasion, Cardiff, CF14 5ZN or report online via the www.gov.uk website by searching 'report a fraud' in the search GOV.UK field.