HMRC paid informants more than £343,000 last year for providing information on potential tax evasion, down from a peak of £605,000 in 2015, but still a potential ethical challenge according to City law firm RPC
It warns there is a risk that such payments could encourage data theft, especially by disgruntled ex-employees who may have an axe to grind against their former employers. HMRC also receives information from spouses during divorce proceedings, who may provide details after financial negotiations have broken down.
Adam Craggs, tax partner at RPC, said: ‘HMRC appear to be willing to utilise any information that they receive, irrespective of its provenance, as they did when they received stolen data from HSBC Suisse. It seems that as long as the data may increases the tax yield, HMRC will utilise it.
‘Concerns have been raised that paying informants for intelligence on tax evasion might appear to legitimise data theft, raising both legal and ethical issues.’
RPC says that rather than relying on informants to increase the tax yield, HMRC should be provided with the necessary resources it needs to enable it to properly deal with compliance issues.
Report by Pat Sweet