Taxpayers have reportedly made 107,000 reports of suspected tax evasion to HMRC in the last year, according to new research from UHY Hacker Young.
The firm said the rise of reports was in part driven by HMRC opening its 24/7 ‘Covid fraud hotline’ last October. The hotline allows people to anonymously report suspected fraud in relation to Covid support schemes, including furlough.
It comes as tax evasion has reportedly become a much higher profile issue since the last recession, and is viewed as “increasingly unacceptable” by the public. According to UHY, more individuals are willing to report those who are deliberately underpaying tax as a result of this.
The firm added that HMRC’s usual tax evasion hotline was closed for the initial four months of the pandemic, as resources were redirected to implementing the furlough scheme.
In addition, its postal tax evasion reporting service has also been suspended for the past year to help prevent the spread of Covid. According to UHY, reports would have been “even higher” if these services had remained open.
HMRC estimates that up to £3.5bn of fraudulent or mistakenly claimed money will need to be recovered from the furlough scheme alone, while it has also received over 28,000 reports of suspected fraud purely in relation to the furlough scheme.
Phil Kinzett-Evans, partner at UHY Hacker Young, said: “This is a remarkable number of reports of tax evasion, given that individuals were deprived of the opportunity to make reports for a third of the year.
“In the past, more people might have chosen to turn a blind eye to tax evasion, thinking that it was none of their business. Over the last 15 years, people have generally come to accept that paying your taxes honestly is a responsibility everyone shares. Fewer people feel guilty about reporting those who don’t.”
He added: “Individuals that have been involved in tax evasion ought to make a disclosure to HMRC at the earliest opportunity and seek specialist advice in the process. HMRC will be far less sympathetic towards those that deliberately conceal their tax affairs and choose to keep quiet.”