Compliance

UK Payments To Informants Rise Sharply In Battle Against Tax Dodgers

Tom Burroughes Group Editor London 18 June 2015

UK Payments To Informants Rise Sharply In Battle Against Tax Dodgers

The UK's tax authority paid significantly more money to informants in its battle against tax dodgers in the 2014/2015 financial year, figures show.

The UK’s tax authority paid 50 per cent more money to informants in the year ending 31 March than a year prior when tracking down tax dodgers, figures show.

A total of £605,000 ($957,000) was paid to informants, up from £402,000 a year earlier, according to London-based law firm RPC. The firm acquired the figures by using a Freedom of Information Act request; the data was later confirmed to this publication by a spokesperson for HMRC.

The jump in the amount of money being paid to informants has been partly driven by a surge in public awareness about HMRC’s efforts to track down tax evaders, RPC said.

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, the firm continued.

RPC also said that HMRC is also under increasing pressure to make the most of information that is offered. The tax authority was criticised after an incident in 2010 when a spreadsheet 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, RPC said. The “Lagarde list” is part of a much larger data set, known as the "Falciani list". Hervé Falciani, a computer technician at HSBC, is accused of stealing data from HSBC’s Swiss private bank. Legal proceedings continue against Falciani, whose claims to be a whistle-blower are contested by Swiss authorities.

The total “compliance yield” stemming from various enforcement and compliance campaigns in the UK last year, including the figures for use on HMRC’s hotline, was £23.9 billion, the spokesperson said, adding that there isn't a direct match between the sums paid to informants and resultant recovered revenues. Some informants don't seek financial rewards and HMRC uses its discretion in the amount it pays on a case-by-case basis.

Adam Craggs, tax partner at RPC, said: “HMRC does not widely publicise the payments it makes to informants. If too many people know that they can get paid for information supplied to HMRC they may be less willing to provide information for free."

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