Avoidance whistleblowers in record windfall

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HMRC is increasingly incentivising people to shop their friends and family as part of its continued crackdown on tax avoidance.

According to data from law firm RPC, the Revenue’s payments to informants have surged by more than 50% in the past year. The amount of money given in exchange for tip-offs has leapt to a record high of £605,000, compared to £402,000 for the 2013-14 tax year.

The report claimed that greater public awareness about potential rewards has led to individuals working in financial or professional services increasingly joining the legion of informants – a position usually reserved for ex-spouses or disgruntled former employees.

HMRC said the majority of whistleblowers receive no reward for divulging their secrets, and reiterated its stance of not publicising the payments it makes to informants.

The Revenue added: “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.”

Adam Craggs, tax partner at RPC, warned that the majority of taxpayers have “an unrealistic view of the value of their information”. He urged would-be whistleblowers not to use the prospect of a financial reward as the main reason for supplying information.

HMRC was unable to put an exact figure on how much tax was collected via informants. However, it did say its employees chased down an additional £23.9 billion in unpaid levies last year.

Have your say

What do you think of the news? Would it encourage you to become a HMRC informant? Do you think this is an effective way to tackle tax avoidance? Join in the discussion on Twitter, or leave a comment below.

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