HMRC pays out £350,000 in a year for tax fraud tip-offs
Members of the public who provide “exceptionally helpful information” on tax evasion can receive payments, HMRC says
HM Revenue and Customs paid out nearly £350,000 to members of the public who alerted the department’s investigative team to tax fraud, it has been revealed.
The head of the National Audit Office, Sir Amyas Morse, said the tax agency had told him of £343,500 in payments to people who had provided it with “exceptionally helpful information” in 2017-18.
HMRC has the power to give financial rewards to people who give information that helps the department root out tax fraud and evasion.
- HMRC to reveal impact of Concentrix contract collapse on tackling fraud and error
- HMRC showing cracks under Brexit pressure, MPs warn
- HMRC hails progress against scam websites and texts
In a letter to Chris Heaton-Harris, MP for Daventry, the auditor general said the NAO had never looked into these payments, but had made enquiries after the MP wrote to him about a constituent who had received a payout.
Morse’s enquiries determined that the payments came out of the operational expenditure budget for HMRC’s Risk and Intelligence Service - a team in its customer compliance unit with criminal investigatory powers.
A spokesperson for HMRC told CSW that the “vast majority” of people who alert the department to potential tax cheats do so “without any expectation of any financial reward”.
“However, there will be occasions where it is appropriate for HMRC to pay a reward to individuals in return for them providing us with information,” they added.
“The payment of rewards is at the discretion of HMRC.”
Morse said the size of these rewards depends on a range of factors, including the amount of tax recovered using the information; the estimated revenue that would otherwise be lost; and the time saved examining cases using other methods.
How they are authorised depends on the sum being paid. Payments of up to £5,000 can be authorised by a senior officer, and up to £10,000 by a civil servant at Grade 7. A deputy director is required to sign off payments of up to £100,000, and a director for up to £250,000. Payments upwards of £250,000 must be approved at director general level.
The payments are not reported in HMRC’s annual accounts because the amount awarded is not deemed to be a “key performance metric”, Morse said. However, he added that the department said it did routinely reveal payments in response to Freedom of Information requests and correspondence with MPs.
Morse was responding to a query from Heaton-Harris, who wrote to him in November after a constituent received a payment from HMRC. The MP had asked where the payments came from, how they were authorised and under what legislation they were awarded.
The payments were allowed under Section 26 of the Commissioners for Revenue and Customs Act 2005, Morse said.
The HMRC spokesperson said it valued information passed on by the public and businesses.
“Clamping down on those who try to cheat the system through evading taxes and over claiming benefits is a key priority for us and we are committed to ensuring the tax system operates fairly and efficiently,” they added.
“All the information we receive is assessed and a decision made on the most appropriate course of action."
NICS chief says he is "proud" of how civil servants have handled “significant pressure” of...
Further-education plans also come under scrutiny as Labour promises not to be a “top-down...
Biggest civil service union targets Marsham Street after £3m DWP payout
Education funding pledge comes after figures reveal teacher training shortfall
BT takes a look at the shifting nature of cyber threats, and how organisations can detect and...
Microsoft shows a few of the ways that governments can turn data into insight
With the ‘low-hanging fruit’ exhausted, the public sector must approach new government saving...
TCS is keen to contribute to the topic of successful partnerships between the public and private...