The law says the amount of money paid out for information about individuals or firms failing to pay the correct amount of tax totalled £473,000 in 2019/20, up from £290,250 the previous year.

Adam Craggs, head of tax at RPC, said: ‘HMRC receives a large number of “tip-offs” to its hot-line in relation to small-scale tax evasion, but it has come under pressure in recent years to investigate big ticket tax evasion and it is willing to pay informants who have reliable information relating to such fraud.’

RPC says that one of the areas where HMRC is likely to pay significant sums of money in the coming months is for high-quality information relating to abuse of the government’s coronavirus stimulus package, including the coronavirus job retention scheme (CJRS).

HMRC has already begun to crack down on fraud relating to the furlough scheme, making its first reported arrest of a 57 year-old West Midlands man last month as part of an investigation into a suspected £495,000 CJRS fraud.

RPC says payments to informants have traditionally been made to disgruntled employees, or former employees reporting the underpayment of tax.

Michelle Sloane, partner at RPC, said: ‘Whilst many whistle-blowers are simply doing what they consider to be their civic duty, some have other motivations, for example, a disgruntled employee who has fallen out with their employer.

‘The payment to informants for data that has been taken illicitly raises certain ethical issues for HMRC.’

Another useful source of information is former spouses who 'know where the bodies are buried' and are happy to provide information relating to tax fraud committed by their ex-partner.

‘Disgruntled employees may tip-off HMRC as a way of getting back at their employer. HMRC needs to ensure that it carries out appropriate due diligence to ensure the information it receives is credible,’ Sloane said.