40,000 Whistleblowers Tip Off HMRC Tax Dodger Hotline

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The tax man may not pick up the phone as quickly as most taxpayers would like but whistleblowers seem to have no problem getting through.

HM Revenue & Customs has revealed more than 40,000 callers clamouring to tip them off about tax cheats got in touch last year.

That’s double the number of calls logged for 2016-17 and does not include informers who shopped alleged tax dodgers online, in a letter or face-to-face with tax officials.

In return for their information, HMRC rewarded the tipsters with a cash bounty that added up to £343,500.

Most of the callers were former spouses angry with their partners; neighbours; work colleagues or former business partners wanting to get even.

Confidential communication

HMRC runs the confidential hotline to gather information for tax investigations, promising anonymity and a reward based on any recovered undeclared taxes.

HMRC handlers also encourage informants not to reveal themselves by trying to uncover more details about suspected cheats and to keep quiet about telling them about the tip so the target has no time to unravel their web of deceit.

“Information provided by the public is a crucial element of HMRC’s work to close the tax gap,” said HMRC’s Jennie Granger.

“It’s vital that the reporting process is as simple and accessible as possible. We encourage the public to continue to work with us and report any suspected fraud or evasion to us for investigation.”

The HMRC web site has a special page devoted to whistleblowers.

Other pages encourage informants to shop traders or businesses for tax evasion or to report anyone dodging alcohol or tobacco duties.

Plugging the tax gap

“Tax evasion can take several guises, such as not telling HMRC about tax they owe, for example on business profits; keeping business ‘off the books’ by dealing in cash and not giving receipts or hiding money, shares or other assets in an offshore bank account,” says the HMRC web site.

HMRC estimates the gap between expected tax receipts and the amount paid is £33 billion for 2016-17.

“The tax gap arises for a number of reasons. Some taxpayers make simple errors in calculating the tax that they owe, despite their best efforts, while others don’t take enough care when they submit their returns,” says HMRC.

“Legal interpretation, evasion, avoidance and criminal attacks on the tax system also result in a tax gap.”

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