Tax fraud hotline call numbers double despite fall in tip-off payments

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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.

tax hotline

*Source: HMRC

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.

About Tom Herbert

Tom is editor at AccountingWEB, responsible for all editorial content on the site. If you have a story that might interest us or wish to comment on the site's coverage get in touch via the site's private message function or Twitter DM (@AWebTom)

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29th Aug 2018 05:59

It's human nature not to want to part with money once worked for and received. The people under the paye regime escape this dilemma as they receive pay after tax and nic deductions. They are lucky really.
Sadly there are many sole traders who flout the law some working completely off the record and some only declaring a small fraction of their receipts. We have all met these traders at our home. One gardener and his son told me they were always busy declaring only the formal contract work which paid them by cheque. The cash jobs were 70 per cent of earnings and undeclared.
I had an upmarket landscape gardener who nudged and winked at me and said ' a good accountant is one where you pay no tax'. I gave him a mild rebuke saying that was nonsense and that he could end up in jail with such an accountant.
The public truly believe there exists this whiz kid accountant that can magic tax away.
In the larger businesses large frauds take place but HMRC never seem to investigate these - they like the small fry to hound and wipe out.
I speak from 40 years experience seeing small freelancers hounded yet medium sized businesses never challenged.
There does seem one law for the poor and another law for the rich.
I have always said ' the agent is only as good as the client ". Representing the fraudster is a no win pathway and we need honest clients.
If you pay your taxes you never become affluent but your conscience is clear. My fiscal neurons are in full clarity.

Thanks (2)
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to Mrbailey
29th Aug 2018 09:45

How on earth after 40 years experience can you suggest that dishonest tax agents helping clients perpetrate tax fraud is a significant problem? That is garbage as only extremely dumb agents (who are not really proper agents in the 1st place let's face it) would even consider doing that (this isn't Italy you know) & HMRC quite rightly throw the book at the very insignificant number of such so-called agents and you seem unaware of that too.

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29th Aug 2018 18:26

Shame the Great Gods HMRC, take no notice of potential fraud and malpractice when reported, in writing by qualified agents, such as myself.

Actual case and supposed "accountant" - unqualified no professional body membership - acting in breach of AML and engaged in false accounting.

No response ever over four years ago...

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to Michael C Feltham
30th Aug 2018 13:02

I have had the same experience reporting both individual and their unregulated agent. Sadly, it seems that HMRC sets a high financial bar for investigating individual cases. In my case there was not even a letter from HMRC asking for clarification of the particular amounts in question. I know this did not happen as I still have the accounting records!

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