Nice little earner- take a backhander from HMRC
Times have been tough, and what with summer holiday season coming up, who wouldn't like a nice little extra in their pocket? Well, it seems there is a quick and easy way to get some spare cash, and all you have to do is snitch on your ex-partner/significant other/neighbours to HMRC...
New figures show that backhanders payments to tax informants have jumped by almost 50% in the last year. In 2014/15 a record £600,000 was paid to people who had reported suspected tax dodges by calling HM Revenue & Customs' (HMRC) confidential telephone hotline, with around 100,000 calls made, compared with £402,000 paid out the year before, and a similar amount (£395,000) in 2012/13.
Now, mathematicians will have spotted that £600,000 in payments compared with 100,000 calls does not add up to a fat lot of cash per call. But many of the callers to the helpline do not necessarily have a pecuniary motive behind the call. The majority of people who tell tales on report the tax affairs of others are bitter ex-wives (or husbands) or disgruntled former work colleagues. Sources suggest that a reward of between £50 and £1,000 is most commonly given, but only if the information leads the taxman to a “big win”. Of course, should you have extremely lucrative information, that could also translate to a higher pay out.
But why have the amounts gone up this year? Either people are just getting grumpier with each other, or people are wising up to the fact that, if they are inclined to share some juicy details with HMRC, they may as well be compensated for their trouble.
The ‘hotline’ for tax informants was set up in April 2006, and launched with a £1 million advertising campaign that showed a worker ‘getting away’ without paying tax. However, what is less widely publicised is the fact that HMRC have discretion to pay you for your information- after all, if you’re going to do it, you might as well do it properly. Adam Craggs, a tax partner at law firm RPC, suggested insightfully that "if too many people know that they can get paid for information supplied to HMRC they may be less willing to provide information for free."
A spokesman for HMRC said: "The majority of people who provide information to us do so without any expectation of a financial reward. Cash rewards are discretionary and based on what is brought in as a direct result of the information provided.
"We receive information from a wide variety of sources and it is always used to make sure everyone pays what they should."
Now, the only question that remains is- are HMRC backhanders undeclared income too…?