Payments to informants increased by 63% in a year, says RPC

The amount of money paid to informants increased by 63% in the past year, as HMRC stamps down on tax evasion, according to a leading law firm.

In 2019/20, informants were paid £473,000, up from £290,250 from last year, with informants traditionally being disgruntled or former employees.

According to RPC, one of the areas that HMRC is ‘‘likely to pay significant sums of money’’ in the months ahead is for high-quality information relating to abuses of the government’s Covid-19 stimulus package.

HMRC has already cracked down on fraud relating to the government’s furlough scheme, with the authority making its first reported arrest of a 57-year old man in the Midlands last month while investigating a suspected £495,000 furlough scheme fraud.

Adam Craggs, RPC’s head of tax, said: ‘‘HMRC receives a large number of ‘tip-offs’ to its hot-line in relation to small-scale tax  evasion, but it has come under pressure in recent years to investigate big ticket tax evasion and it is willing to pay informants who have reliable information relating to such fraud.”

Michelle Sloan, a partner at RPC, said: ‘‘Whilst many whistle-blowers are simply doing what they consider to be their civic duty, some have other motivations, for example, a disgruntled employee who has fallen out with their employer. 

‘‘The payment to informants for data that has been taken illicitly raises certain ethical issues for HMRC. Disgruntled employees may tip-off HMRC as a way of getting back at their employer.’’

She added: ‘‘HMRC needs to ensure that it carries out appropriate due diligence to ensure the information it receives is credible.’’