HMRC’s crackdown sees 73,000 tax evasion tip-offs

HMRC’s crackdown sees 73,000 tax evasion tip-offs

In the last financial year, HM Revenue & Customs (HMRC) have seen a 10% increase in whistle-blowing reports for tax evasion, according to data released by UHY Hacker Young.

In 2018/19, the taxman received 66,000 tip-offs, this increasing number of reports can be attributed to the nations shift in attitude towards treating tax evasion as “unacceptable behaviour”. HMRC are relying more on whistle-blowers to deliver valuable leads on possible fraud and evasion cases.

It is likely that furlough fraud is also driving reports, with 4,500 employees already alerting HMRC to potential furlough scheme abuse from employers before 1 July 2020.

Accountants and financial advisors are now the responsible ‘first line of defence,’ as they have a duty to report potential tax evasion cases under the ‘failure to prevent tax evasion’ regulations. Any professional who fails to report suspicious behaviour will find themselves hit by serious penalties or criminal proceedings.

Last week, it was reported that HMRC are investigating 250 wealthy taxpayers as well as 23 of the UK’s largest businesses for potential tax evasion crimes. Tim Cook, Senior Tax Partner points out that “HMRC are expanding their investigation services into all areas and especially all Covid19 related support payments.”

HMRC are “clamping down on those who cheat the system through evading taxes and overclaiming benefits” as a priority. It is expected that the total number of fraudulent reports will continue to rise during the current financial year.  The Chancellor stated in the last budget that this crackdown on tax avoidance will create £4.4bn in revenue over a 5 year period.

If you have any questions on this matter, or require advice surrounding tax investigations, then please do not hesitate to get in touch with us.