Kick in the taxes

HMRC’s message that they are “closing in on undeclared income” is a familiar sight in public places but despite the spying imagery it seems that using informers is not a major part of its plan to tackle tax evasion. Is it missing a trick?

HMRC do offer financial rewards to tax informers and in 2011/12 paid nearly £375 000 for information that led to more tax being collected. However the department’s “tax evasion hotline” is not central to their current media activity.

HMRC’s mechanism for deciding how much is paid to informers appears to be ad hoc and the criteria used are not published. Payments are discretionary and made on a “case-by-case” basis depending on what is achieved as a direct result of the information.

By contrast in the US the Internal Revenue Service has had a whistleblower office for many years. It...