HM Revenue & Customs (HMRC) was sent around 73,000 reports of tax evasion in the last financial year, accountancy group UHY Hacker Young revealed.
The figure shows a 10% increase from the 66,000 tip-offs the taxman received in 2018/19.
According to the accountancy network, the growing number of reports made to HMRC can be attributed to a rise in the general public increasingly treating tax evasion as unacceptable behaviour.
People are more sensitive to the issue after a decade of austerity measures, the firm added.
HMRC has also been relying more on whistleblowing reports, as they often provide valuable leads on potential evasion and fraud cases.
Full compliance
But UHY Hacker Young added that not all 73,000 reports may come from whistleblowers.
Financial advisers and accountants are now required to report any potential cases to the taxman under the ‘failure to prevent tax evasion’ regulation.
Not doing so could result in harsh fines and potential criminal proceedings against the individuals and/or firms involved; which is why anything suspicious is flagged up to HMRC.
Sean Glancy, partner at UHY Hacker Young, said: “It appears that more people than ever are choosing to report a neighbour, employer or business partner for tax evasion.
“The financial pressure some people have been under in recent years may have affected whether they are willing to report someone they know, even if they haven’t directly been impacted by the tax evasion.
“‘On the ground’ intelligence is critically important in helping HMRC target its use of the vast amounts of data it holds on taxpayers.
“Accountants and other advisers are also now a ‘first line of defence’ for HMRC against tax evasion.”
Going the extra mile
Glancy added that, considering how much money has already been spent to cover the cost of the covid-19 crisis, the taxman will go even harder clamping down on tax abuses.
“They are, therefore, likely to be even more keen than usual to pursue tax evaders and fraudsters, potentially making whistleblowing routes even more obvious and accessible in order to help them do so.”
At this time, however, it is unclear how many of the 73,000 reports turned out to be helpful and how much money the taxman managed to recover.
UHY Hacker Young believes the total number of reports will rise in the current financial year due to the fraudulent behaviour that the furlough scheme has attracted.
Up to 1 July 2020, HMRC received 4,500 tip-offs from employee whistleblowers concerned about their employers’ use of the scheme.
