HMRC is paying many thousands of pounds each year to informants who tell them about people who are not declaring all of their income.
Paid informants received £373,780 in 2011/12 which was well up on the previous year’s £309,620.
This information was obtained thanks to the London law firm Reynolds Porter Chamberlain LLP (RPC) who extracted it from HMRC under the Freedom of Information Act.
One of RPC’s partners Adam Craggs said “Typically, an HMRC informant will be an angry spouse during divorce proceedings. For the spouse, threatening to supply information to HMRC provides them with some leverage during divorce settlement negotiations. If the divorce is particularly acrimonious, it is not uncommon for a spouse to turn HMRC informant.”
And how right Mr Craggs is. I know from my time working for the Revenue that one of the most valuable informants is an aggrieved former spouse. I recall specific cases where these spouses came into the tax office to provide very detailed information about the tax-fiddling of their estranged other half. I recall one woman confirming we had all the information we needed, then announcing “Right then, now I’m off to the dole office!” This was because the guy was also fiddling his benefits. A woman scorned…
VIDEO ON THIS: http://youtu.be/ljX2jcf1gVk
In my days in HMRC there was no prospect of paying informants. People told you stuff about suspected tax evasion for a variety of reasons, for example because:
- they felt it was the right thing to do
- they were jealous that they couldn’t fiddle their taxes
- they had been annoyed by your business (perhaps they live nearby)
- you did a shoddy job for them for cash
- you used to employ them
- you and they used to be in a relationship and it’s over
People still call in a local tax office (if they can find one) to share information about tax fiddling, and they also write to HMRC, either giving their name or just dishing the dirt anonymously.
HMRC has set up a Tax Evasion Hotline 0800 788 887 which is staffed 0800hrs to 1800hrs Monday to Friday. This is a confidential number so you can report someone who you suspect is not paying the right amount of tax. By the way, before calling, see how much you can gather to help identify the suspected fraudster, like name, address, vehicle number, mobile number, landline number.
As with any confidential supply of information, HMRC is aware you may have your own motives for making the call. They also know that what you say is suspicious may turn out to be innocent, or may be properly declared. Nevertheless they will consider everything you tell them.
Again from my experience as a Tax Inspector I recall investigating people where we had anonymous information in a letter making various allegations. Many of the allegations turned out to have an acceptable explanation, but there were very useful nuggets which turned a dead-end investigation into a fruitful one.
Nowadays the Tax Evasion Hotline even allows you to inform on someone over the internet – using the form at www.hmrc.gov.uk/tax-evasion/hotline.htm You must supply an email address that HMRC can use to send you an acknowledgement. If you don’t supply that then they will ignore what you are saying. They will not however contact you for further information.
On the other hand if you are happy to be contacted for further clarification, then there is space to leave your fuller contact details. Given how easy it is to set up a gmail account, this effectively means you can give your information pretty-much anonymously.
As for becoming one of these paid informants, I haven’t a clue how you go about it. I know in the past some of the money HMRC paid was to obtain, from former bankers, lists of offshore account-holders from the UK. As for who the recent payments went to, it’s anybody’s guess as HMRC has the whole process cloaked in secrecy. If your information helps bring down a big-scale tax fiddler then there might be scope to get paid for your help. I guess if you wanted to see if a reward might be payable you should make that clear in your first contact with HMRC. Also keep a note of when you phoned and any reference you are given. This would help if in the future you wanted to claim your information helped HMRC bring down Mr Big.
Are there any lessons to learn now you know HMRC pays informants?
- Don’t fiddle your taxes.
- Don’t let others know you fiddle your taxes – even your spouse or closest friends.
- If you are fiddling, then stop.
- The longer you are stopped the more chance you might get away with it.
Wonder how much HMRC will pay people for tax evasion intelligence this year?
VIDEO ON THIS: http://youtu.be/ljX2jcf1gVk