How Does HMRC Spot Tax Evaders?

 In Behavioural Insight, HMRC Investigation, snitch, Tax Evaders, Whistleblower

I get asked this all the time, there is a very good piece in the FT about this which you can read here. But in this post I’m going to focus on the big one, and that’s people grassing.

At the moment there is much talk about how HMRC is using algorithms and predictive behaviour to target tax dodgers, but there is nothing like a bitter ex-partner or a disgruntled employee to spill the beans. Snitches could well be the number one resource of HMRC.

HMRC are looking for solid information and big figures before they put their hands in their pockets. The Independent reports some £100,000 was paid to a Liechtenstein banker for handing HMRC a list of secret offshore accounts held by Britons in 2008.

In 2013 The Telegraph ran a story about how much HMRC paid out to snitches, £1 million over three financial years. Alongside a quote from HMRC saying, “Hundreds of people a year have received rewards ranging from about £50 to thousands of pounds, depending on how much tax is recouped as a result of the information provided.”

The reality is that just over £300k a year for all the snitches across the UK is buttons; not much of a motivation. But that could now all be about to change, sources tell me that there are plans to cut snitches in for straight 10 percent of the tax recovered.

If you are an accountant at a big company that’s on the fiddle to the tune of millions that 10 percent could represent paying off the mortgage, early retirement and even a new life. Angry ex-spouses could also be in for a windfall.

The 2014/15 tax year could well turn out to be the year of the snitch.

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