In 2016-17 there were 20,200 calls made to HMRC’s tip off hotline. This phoneline is specifically for members of the public to report those they suspect of not paying their tax or of committing fraud. In 2017-18, this dramatically rose to over 40,000 such phone calls.
Interestingly, in the same time period, the amount HMRC paid for information actually fell by 23%. In 2017-18, £343,500 was spent paying whistleblowers for their information about those trying to avoid their tax liability. Payments are directly related to the quality of the information provided and how much tax HMRC are able to recover as a result.
Why were there so many extra tax avoidance tip off calls last year?
The doubling of call volume is partly attributed to the fact that HMRC have combined two phone hotlines into one. Previously, there was one line for customs fraud and a separate line for tax evasion. The government has also invested in a strong publicity campaign for this new, single phoneline.
Does the phoneline save us money?
HMRC said: “Our public services rely on everyone paying their taxes. 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.”
That’s a huge amount of money, although it’s not all come directly from tip offs from the public. The phoneline and payment of informants are just a couple of the tools in HMRC’s box.
Due to legal restrictions, HMRC are not able to let informants know the outcome of any cases that they may have provided information for. The confidentiality surrounding the process makes it hard to determine if the money paid to informants is worth it, because we cannot find out if it led to an equal or larger amount of recovered tax.
How do they know the information is true?
HMRC say they thoroughly investigate all the information they are given, but some people are concerned by the motivation of those providing the ‘tips’. As reported in the Financial Times, RPC tax partner, Adam Craggs, said: “HMRC appears to be willing to utilise any information that it receives, irrespective of its provenance…Rather than relying on informants to increase the tax yield, HMRC should be provided with the necessary resources it needs to enable it to properly deal with compliance issues.”
How do I report someone to HMRC?
Go to www.Gov.UK to find the current fraud hotline number, postal address and online reporting process.
The whole situation is one of the more unpleasant areas of tax collection. The idea of secretly ‘snitching’ on someone’s financial situation is not appealing to many. But if you’re paying your fair share of tax, then why shouldn’t everyone else? What do you think?