The number of tax evasion whistleblowing reports made to the taxman has jumped 10 per cent in the past year, in a sign people's patience with tax dodging is wearing thin.
Data from accountancy firm UHY Hacker Young, published today (September 1), showed HMRC had received 73,000 whistleblowing reports in 2019/20 — 10 per cent more than the 66,000 tips filed by informers the year before.
According to UHY Hacker Young, a major driver of the rise in whistleblowing was the “steadily increasing view” among the general public that tax evasion was “unacceptable behaviour”.
Accountants also now have a duty to report all potential cases of tax evasion under the ‘failure to prevent tax evasion’ regulations, and accountants and other advisers can now find themselves with serious financial penalties if they do not report something suspicious.
Furlough fraud is likely to drive the number of whistleblowing reports, the firm added, with 4,500 employee whistleblowers alerting HMRC to the fact their employer may be abusing the furlough scheme by July 1, 2020.
An HMRC spokesperson said: “We value the information we receive from the public and business community.
“Clamping down on those who try to cheat the system through evading taxes and overclaiming benefits is a key priority for HMRC and we are committed to ensuring the tax system operates fairly and efficiently.”
Sean Glancy, partner at UHY Hacker Young, said whistleblowers were a “vital source” of information for HMRC, adding that accountants and other advisers were also now a ‘first line of defence’ for the taxman against tax evasion.
He added: “HMRC has spent billions of pounds already this year in their efforts to combat the worst of the coronavirus pandemic.
“They are therefore likely to be even more keen than usual to pursue tax evaders and fraudsters, potentially making whistle-blowing routes even more obvious and accessible in order to help them do so.”
The findings come as HMRC continues to bolster its crackdown on tax evasion and avoidance.
Last week data showed the taxman was probing 250 wealthy individuals for serious tax evasion, as well as 23 of the 2,100 largest businesses in the UK.
The government pledged extra funding to support its crackdown on tax avoidance at the budget, which the chancellor said would create an additional £4.4bn in revenue over the next five years.
Meanwhile, the average prison sentence for tax evasion has increased by 10 per cent since 2017 and the taxman has pushed for the crime to be considered a more serious offence.
imogen.tew@ft.com
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