This year HMRC has paid £460,000 to individuals that have provided information to the tax authority on tax evaders, according to law firm RPC
HMRC uses confidential informants to gather information on individuals that are suspected of tax evasion or avoidance and offers payment as a reward for useful evidence.
The size of payment is decided on a case-by-case basis, but will often be based on how much extra tax HMRC expects to recover as a result of the information given.
Financial and professional services firms could be at risk however, as ex-employees often have access to confidential financial information and may inform on former employers in exchange for a cash reward.
Adam Craggs, Tax Partner at RPC,said: ’The hundreds of thousands of pounds HMRC is paying out every year to informants reflects the pressure they are under from the Exchequer to increase the tax yield.
‘However, there have been questions raised over whether it is right for HMRC to pay for what could be regarded as stolen data. It may encourage more data theft and create the perception that the UK government is turning a blind eye to theft.’