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200,000 Brits Shopped To The Tax Man In One Year

by Robert Lee, Tax-News.com, London

10 July 2007


Almost 200,000 Britons have shopped their friends, family and colleagues to the tax man in the year since HM Revenue and Customs set up a confidential hotline for taxpayers to inform on those they suspect of dodging their taxes.

HMRC told The Times newspaper in response to a request made under the Freedom of Information Act that it had received telephone 155,000 calls to its tax evasion hotline. In addition, the department received almost 18,000 emails, 12,000 letters and faxes, and more than 3,800 referrals from the Customs hotline, which was set up in 2005.

However, it is difficult to gauge the effectiveness of the HMRC initiative, as the Treasury reportedly refused to divulge to the Times how many successful prosecutions had resulted from such informants, nor how much extra tax had been brought in.

An HMRC spokesman told the paper: “The details of the call are processed and if the risk and intelligence team decides that we should proceed with intervention they will gather information from various places, such as company accounts, employer records, self-assessment forms and tax credit information to support the allegation."

Unlike the United States or Australia, informants in the UK receive no monetary rewards for shopping tax evaders.

In February 2007, HMRC stepped up its enforcement campaign by urging workers who suspect that their employer isn't paying tax and National Insurance to ring the Tax Evasion Hotline and report them.

HMRC's Director of Risk & Intelligence, Stuart Hartlib explained at the time that:

"Employees can tell us about rogue employers who do not correctly apply and account for Pay As You Earn and National Insurance contributions. They are being cheated by their employer. If National Insurance contributions are not paid employees could lose out not only on their State Pension but also other workers' benefits such as incapacity benefit and contribution-based Jobseekers Allowance."

"If employers do not pay their fair share, they are cheating law-abiding employees out of what is rightfully theirs. Every employee should receive a payslip and a P60/P45 which indicate whether their tax and National Insurance is being correctly accounted for."

However, HMRC has said that it needs additional powers and deterrents to extract money from non-payers, in order to reduce the cost and effort of pursuing around 200,000 people through the court system every year.

In a consultation document released last month, HMRC proposed taking money directly from people's bank accounts if other methods of collection failed to clear their debts. The consultation document also asks for views on whether it should be allowed to demand cash from the sale of land or property, including homes, if people do not pay up.

"Taxpayers who owe money to HMRC frequently have sufficient funds or assets to pay their debts, but choose to delay doing so. HMRC currently lacks the full range of powers to ensure prompt payment," the department explained.


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