HMRC has paid out a record £605,000 to informants over the past year according to research by law firm RPC, which says the 50% hike is partly down to a surge in public awareness about HMRC’s efforts to track down tax evaders
Data obtained by the firm shows HMRC made payments of £605,000 to informants in the year ending 31 March 2015, up from £402,000 in the previous year and £395,000 in 2012/13.
RPC claims that the typical profile of an informant has changed, with more individuals working in financial and professional services increasingly offering up information, in the hope that HMRC will pay them for such information. It says this means better quality information is being offered, for which the tax authorities are more likely to make a payment.
There is no going rate for informants in the UK, whereas in the US, there is a clearly stated policy of paying whistleblowers up to 30% of any additional tax, penalty and other amounts the Internal Revenue Service collects.
An HMRC spokesperson said: ‘The majority of people who provide information to us do so without any expectation of a financial reward. Cash rewards are discretionary and based on what is brought in as a direct result of the information provided. We receive information from a wide variety of sources and it is always used to make sure everyone pays what they should.’
HMRC set up a telephone hotline for tax information in April 2006, with a £1m tv and press campaign. Most informants are believed to be disgruntled former partners or spouses, or the neighbours or colleagues of someone who is known to be working without declaring income.
Adam Craggs, tax partner at RPC, said: ‘HMRC does not widely publicise the payments it makes to informants. If too many people know that they can get paid for information supplied to HMRC they may be less willing to provide information for free.
‘The sharp rise in payments is likely to be due to greater public awareness of HMRC’s pursuit of tax evaders. However, many members of the public have an unrealistic view of the value of their information.’
HMRC came under heavy criticism from the Public Accounts Committee last year over its failure to take action more quickly on the leaked details of the so-called Lagarde and Falciani lists of the names of UK taxpayers who held undeclared offshore accounts with HSBC’s private Swiss bank.
