Payments made by HMRC to informants have reached £605,000, up 50% from last year’s £402,000, according to city law firm RPC. As well as increasing general public awareness of tax evasion, RPC has found 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. As the quality and accuracy of information provided improves this also demonstrates willingness on the part of HMRC to invest more money in informants and further demands from the Exchequer to increase the tax yield.
RPC also found that HMRC is under increasing pressure to make the most of information that is offered to them, after being heavily criticised in 2010 when a spread sheet known as the ‘Lagarde list’, containing the details of 2,000 potential tax evaders, was handed over by the former French Minister of Finance (Christine Lagarde) and remained unused for two years and resulted in only one prosecution for tax evasion.
Adam Craggs, tax partner at RPC, said: ‘HMRC is taking inspiration from the US investigatory procedures in a number of areas. The system for paying informants in the future could become very similar to that operated in the US, which could potentially encourage more informants to come forward.’
In the US, there is a policy of paying whistleblowers up to 30% of any additional tax, penalty and other amounts the IRS collects, and RPC questions whether the UK might set up a similar scheme with a clearly set out incentive for informants.
Payments made by HMRC to informants have reached £605,000, up 50% from last year’s £402,000, according to city law firm RPC. As well as increasing general public awareness of tax evasion, RPC has found 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. As the quality and accuracy of information provided improves this also demonstrates willingness on the part of HMRC to invest more money in informants and further demands from the Exchequer to increase the tax yield.
RPC also found that HMRC is under increasing pressure to make the most of information that is offered to them, after being heavily criticised in 2010 when a spread sheet known as the ‘Lagarde list’, containing the details of 2,000 potential tax evaders, was handed over by the former French Minister of Finance (Christine Lagarde) and remained unused for two years and resulted in only one prosecution for tax evasion.
Adam Craggs, tax partner at RPC, said: ‘HMRC is taking inspiration from the US investigatory procedures in a number of areas. The system for paying informants in the future could become very similar to that operated in the US, which could potentially encourage more informants to come forward.’
In the US, there is a policy of paying whistleblowers up to 30% of any additional tax, penalty and other amounts the IRS collects, and RPC questions whether the UK might set up a similar scheme with a clearly set out incentive for informants.
